ABL Branch Operations Case Study

Branch Operations
Case Study
Document ID: ABL Branch Study
Proprietary and Confidential Information
Allied Bank Limited

Lahore, Pakistan
By
Ibrahim Software
Document & Data Control
1. Project Information
Customer: Allied Bank Limited
Project: Typical Branch Operations Study
2. Document Information
Name: ABL Branch Study
Version: 1.0
Author(s): Sohail Aziz, Ijaz Ajmal, Nauman-ul-Haq
Approver(s): Mujahid Ali
Creation Date: 7th April 2006
3. Revision History
Author Date Version Description

ABL Typical Branch Operations Study
Table of Contents
Overview..............................................................................................................................5
Facilities visited..................................................................................................................5
Organization Structure.....................................................................................................6
1. General banking.....................................................................................................7
1.1 Account Opening Formalities...............................................................................7
1.2 Account Opening & Maintenance Process..........................................................7

1.2.1 Account Types...................................................................................................................................7
1.2.2 Initial Deposit Limit...........................................................................................................................7
1.2.3 Account Opening Forms (Package)...................................................................................................8
1.3 ATM Card Issuance............................................................................................20
1.4 Cash Deposit.........................................................................................................21
1.5 Cash Withdrawal.................................................................................................23

1.5.1 Cheque Dishonor..............................................................................................................................24
1.6 Physical Cash Management................................................................................25

1.6.1 Cash Management at Branch...........................................................................................................25
1.6.2 Cash Transfer...................................................................................................................................26
1.6.3 Cash Management at Main Branch..................................................................................................27
1.6.4 NIFT Operations..............................................................................................................................28
1.7 Bills........................................................................................................................29
1.7.1 Demand Draft...................................................................................................................................29
1.7.2 Pay Order.........................................................................................................................................33
1.7.3 DAC (Deposit at Call)......................................................................................................................34
1.7.4 Rupees Travelers Cheque (RTC).....................................................................................................35
1.7.5 Telegraphic Transfer (TT) / Mail Transfer (MT).............................................................................35
1.8 Clearing................................................................................................................36
1.8.1 Local Clearing..................................................................................................................................36
1.8.2 Inter City Clearing...........................................................................................................................39
1.9 Outward / Inward Bills for Collection (OBC/IBC)..........................................40
Ibrahim Fibres Limited 1 of 99

1.9.1 OBC / IBC........................................................................................................................................40
1.10 Transfers...............................................................................................................42
1.11 Online Transactions.............................................................................................42
1.12 Term Deposit........................................................................................................45

1.12.1 SNDR..........................................................................................................................................45
1.12.2 PLS Based Term Deposit Receipt...............................................................................................46
1.12.3 Premium plus Account................................................................................................................46
1.12.4 Allied Profit Plus.........................................................................................................................48
1.12.5 Premium Term Deposit...............................................................................................................48
1.13 Inter Branch Transactions (Pak Account)........................................................48
1.14 ATM Operations..................................................................................................49
1.15 Locker Operations...............................................................................................51
1.16 Utility Bills............................................................................................................54
1.17 Prize Bonds...........................................................................................................55
1.18 General Accounts.................................................................................................56

1.18.1 Sundry Account...........................................................................................................................56
1.19 General Processes................................................................................................57

1.19.1 Daily Vouchers............................................................................................................................57
1.19.2 Advance Deposit and Advance Rent...........................................................................................57
1.19.3 Executive Visits...........................................................................................................................58
1.19.4 Peon Book...................................................................................................................................58
1.19.5 Stamps in Hand...........................................................................................................................58
1.19.6 Inward / Outward Dak.................................................................................................................58
1.19.7 Book of instructions....................................................................................................................59
1.19.8 Online List of Branches and Controlling Offices........................................................................59
1.19.9 Circular’s Index...........................................................................................................................59
1.19.10 Office Orders...............................................................................................................................60
1.19.11 Inter Branch Signature Book (IBS/AS).......................................................................................60
1.19.12 Keys Handling.............................................................................................................................60
1.19.13 Inventory Management...............................................................................................................61
1.19.14 Fixed Assets................................................................................................................................62

1.19.15 Attendance Management.............................................................................................................62

1.19.16 Expenses......................................................................................................................................63
2 Finances................................................................................................................64
2.1 Advances...............................................................................................................65
2.2 Imports..................................................................................................................66
2.2.1 L.C Opening Process........................................................................................................................66
2.2.2 L.C Processing.................................................................................................................................66
2.3 Exports..................................................................................................................67
2.3.1 Export Process..................................................................................................................................67
2.4 Credit Application Package................................................................................68

2.4.1 Exposure Summary..........................................................................................................................69
2.4.2 Facility Summary.............................................................................................................................69
2.4.3 Sanction Advice...............................................................................................................................69
2.4.4 Basic Information Report (BIR)......................................................................................................69
2.5 Credit Approval...................................................................................................74

2.5.1 Security Type Descriptions..............................................................................................................76
2.6 Credit Administration Department (CAD).......................................................79

2.6.1 Disbursement Authorization Certificate (DAC) Issuance................................................................79
2.6.2 Security Document Management.....................................................................................................80
2.6.3 MIS Reporting..................................................................................................................................81
2.6.4 Vigilance Officer..............................................................................................................................82
3 Home Remittance Cell (HRC)............................................................................84
3.1 Remittances Processing.......................................................................................84
3.2 MIS Reporting.....................................................................................................85
4 Central Processing...............................................................................................87
4.1 Nostro Account Reconciliation...........................................................................87
4.2 Pak Account Reconciliation................................................................................89
4.3 Allied Bank Rupee Travelers Cheque................................................................89

5 Alternate Delivery Channels...............................................................................90
5.1 ATM Card Generation........................................................................................90
5.2 Call Center...........................................................................................................91
5.3 SWIFT..................................................................................................................92
6 Special Asset Management (SAM).....................................................................94
7 Manual Registers.................................................................................................95

Overview
This document is based upon the study conducted to analyze the business processes and
practices being followed at a typical branch of Allied Bank. We have taken Allied Bank’s
Kashmir Road Branch as a “model branch” and have tried to cover maximum areas and
functions which exist within daily routine of Branch Operations.
Purpose of this study was to go through the existing business processes to identify the
room for improvements and Business Process re-engineering with the use of Information
Technology and specifically software systems e.g. introduction of workflows, integration
of information and centralization of database
Facilities visited
a. Kashmir Road Branch, Lahore
b. Nappier Road Branch, Lahore
c. CAD Office, Upper Mall, Lahore
d. FI, Cash Management, Trade Tower, Karachi
e. Central Processing (ABRTC, Reconciliation),Trade Tower, Karachi
f. ADC (SWIFT Center, ATM, Call Center),Central Office, Karachi
g. HRC, Saima Trade Tower, Karachi

Organization Structure
ALLIED BANK LIMITED
Audit
Committee
Board of Directors
Chief Audit
Officer
President
Corporate & Commercial Special Corporate

Consumer Risk Compliance Information Human
Investment & Retail Assets Treasury Operations Finance
Banking Management and Control Affairs Technology Resources
Banking Banking Management
Investment Liability, Credit Risk Treasury Financial & SW Dev. & Staff Fin.
Car Financing Legal Affairs TROPS CAMLO Support
Banking Agriculture Architecture Front Off. Regulatory And Salary
and Reporting
Syndication Coordination House Fin. Corporate & Capital Central CCD Heads I.T. Management
& Commodity Product Portfolio Market Processing North/Central/ Operations Development
Commercial
Commercial Management Management
SAM South
Heads Reporting
Alternate Office
Leasing North/Central/ Cards D.A.C
Corporate/FI Delivery Automation
South Regional
Risk Channels
CCD Heads
Personal Fin. Processing Planning &
Cash I.T Security
Operation Product Performance
Management/ Head
Heads SWIFT
Financial Commercial &
North/Central/ Retail Risk
Institutions/ New Products Networking Personnel
South
NEW IPOs Development O&M
Regional Regional Emp.Funds&
Coordinator SAM Corporate Retail Risk Benefits
Managers Heads (8) Trade Factory
Image/Ads/
Regional Sports
Regional Operational
Corporate Establishment
Commercial Risk
Heads (5)
Heads(27)
Market Risk
RMs
Sales Team
(RMs)
Country CAD
Branches Regional
CADs(8)

General banking
1 Account Opening Formalities

To open an account, different set of documents is required, depending upon type of
account. For example, individuals and joint accounts require a valid Computerized
National Identity Card (CNIC) or passport to open an account. An introducer is required,
preferably from the same branch / bank to get a new account opened.
2 Account Opening & Maintenance Process
2.1 Account Types

The main accounts types in ABL are
In Pak Rupee
i. PLS Saving
ii. Current
iii. Premium Plus
iv. Term Account
In Foreign Currency
i. Saving
ii. Current
iii. Term Account
Foreign currency accounts can only be opened in US$, JPY, GBP and Euro.
2.2 Initial Deposit Limit

a. Account opening is considered as non-financial information in system; this can be
opened without even a single rupee. There is no initial deposit limit for account
opening.
b. As a matter of general practice, an initial deposit of Rs.500 is required for opening a
new account. However special accounts of Zakat Mustahqeen, widows etc can be
opened with Rs.100.

c. Initial deposit limit for foreign currency account is US $1,000. or equal amount in any
other currency.
Possible Improvements:
a. System should help in enforcement of initial deposit limit at the time of opening the
account, except for the accounts used by branch for its own certain requirements like
collection account etc.
b. Due to lower initial deposit limit, this is an observation of bank staff that those people
approach to get the account opened, who are not entertained by other banks due to
higher initial deposit limit. Mechanism needs to be defined to encourage the higher
initial deposit limit. As an example ABN AMRO does not provide cheque books to
the accounts holders having less then Rs.100,000 as an initial deposit at opening the
account. They encourage using ATM to small account holders.
2.3 Account Opening Forms (Package)

The account opening application package contains following forms in it:
a. Application Form (same for all types of accounts)
b. Signature Card(s)
c. ATM Form
d. KYC Form for Personal Accounts
e. KYC Form for Company Accounts
Account opening forms are physically placed in binder containing 50 to 70 forms and are
stored in strong room for the purpose of record, till undefined period. Proper inventory
management is not in place to handle this record.
a. Lot of redundancy of information is there in different forms being used to collect
information. These forms should be made simple and more informative
b. There should be separate forms for Personal and Company Accounts

c. Proper Inventory Management should be introduced for maintaining the record of

account opening forms at branches.
Information in the main application form is as follows:
1.1.1.1 Account Number

a. Account number is mandatory and comprises of following information:
CC-TTT-NNNN-X
Currency-Type-Number-Check Digit
Different currency codes and separate TT for each currency and type of accounts are
defined in UniBank
b. “Account Opening/Closing Register” is used to record all accounts opened and
closed in branch. This register is audited by the auditors to verify the account opening
formalities.
c. “FC Account Opening/Closing Register” is used to record all accounts opened and
closed in branch.
d. System doesn’t provide next available account number, user have to check it
manually so that no number is skipped in between. A list of next 100 account
numbers along with “check digit” is maintained manually to cover this shortcoming
of system. This is applicable to both local and foreign currency accounts.
a. In account numbering it is possible to have same account number for different
branches. It is suggested that account number should be unique within the bank, so
that there should be no issue, even in case if certain branches are merged together.
b. Also needs to devise a mechanism to eliminate multiple accounts of a single customer
of same type in a branch(s).
1.1.1.2 Photograph
a. As per current practice, photograph is required for identification of customer who
can’t sign and use thumb impression or customers whose signatures are simple and
can easily be copied.

b. Photograph is pasted on SS Card and account opening form. SS Card is scanned for
usage.
a. System should have the provision to store photograph for customers / account
holder(s).
b. Biometrics scan of “thumb impression” should also be there so that identification of
client can be made within the centralized customer database. This technology is also
required as photographs of account holders become old dated, because no mechanism
is there to update photographs.
c. Customer should be encouraged to submit photographs. There should be some
mechanism to keep these photographs updated in the system.
1.1.1.3 Account Major Information (Account Title, NIC, Address)

a. Customer Name / Title information is mandatory in the system. There is fixed coding
scheme defined for Occupation or Business (Economic Sector, Line of Business).
Although this information is defined in the system but it is not being followed
properly by branches.
a. Economic Sector, line of business usage should be properly conveyed to the branches.
Its usage can also be made mandatory.
b. Existing system does not have the provision to record more than one NIC number,
phone and address (either for business or home address).
c. System should provide a query to search account holder on the basis of CNIC and
Biometrics.
d. Multiple accounts of same type can be opened with the same CNIC. System should
prompt when same CNIC exists in database.

1.1.1.4 Minor’s information

a. For minor’s information, date of birth is mandatory for account opening. This can be
verified from B-Form, Birth certificate, matriculation certificate, passport or any one
of these documents. Father’s or Mother’s NIC is required for account opening and
can also be fed in the system.
b. When the minor reaches the age of 18, the account is closed for minor and new
account is opened up. The general practice is that branch people mention the maturity
date on signature card. There is no information of minor account in the system.
a. There should be some option in the system to prompt or restrict user from withdrawal
when the minor reaches the age of 18, so that he/she can be asked to operate the
account on his / her own authority and the status of account can be updated
accordingly.
b. System should provide information on the basis of account type.
1.1.1.5 Operating Instructions

a. This information is used to define the operational authority of the account, weather it
can be operated singly, jointly, either or survivor etc. System does not have the
provision to store this information.
b. In general practice, these instructions are written on SS Card (Specimen Signature
Card) so that these can be referred at the time of withdrawal transactions.
a. Operating instructions should be properly parameterized in new system for an online
referral to account details at counters for proper their implementation.
1.1.1.6 Zakat Deductions

a. There are two options for the customer:
i. Allows bank to deduct Zakat
ii. Customer submits an affidavit that he/she will pay Zakat by himself / herself.

b. Zakat deduction and computation feature is available in system for PLS saving
accounts and PPA operational account only. But the return submitted to SBP, routed
through COK is prepared manually.
System should cater computation and deduction of Zakat from all applicable accounts.
Moreover the reporting requirements of SBP (product wise deduction of Zakat) should be
generated through system.
1.1.1.7 Address of Contact Person / Next of Kin Information

a. This information is gathered to ascertain the whereabouts of client. Incase of death of
account holder the claimer can claim up to Rs.30,000 by submitting an affidavit along
with other documents like death certificate. In case amount is above Rs.30,000,
succession certificate is also required along with other requirements.
Possible Improvement:
a. Next of kin information should be available in the system as currently manual form is
used for reference in case of any such requirement.
1.1.1.8 Special Instructions

a. There could be certain instructions from account holder that needs to be followed
while operating an account for example, if the Cheque amount is more then Rs.25,
000, then NIC should be taken from the drawer.
b. This information is hand written on SS Card and scanned for online referral, while
operating account.
a. Special instructions should be properly parameterized in the new system for an online
referral to account details at counters for their proper implementation.
b. Special instructions and operating instructions should be placed in a sequence on
application form.

1.1.1.9 Specimen Signature Card

a. For scanning of signature cards, scanners are available at all branches. Cards are
scanned and made available at the terminals for withdrawal so that teller can verify
the signatures. Multiple cards against one account can be stored.
b. Cash Deposit in-charge is responsible for scanning and record keeping.
c. In addition to the signature following additional information, if required, is written /
pasted on it.
i. Minor’s information
ii. Operating Instructions
iii. Special Instructions
iv. Photograph
e. System provides the facility to change the SS Card on request from client.
1.1.1.10 Introducer
a. Introducer should have minimum one year old active account with the bank.
b. Verification is normally done through the client as he/she is asked to get it verified
from the respective branch of that introducer.
c. Introducer is only responsible for the genuineness of the client identity and address
information. In special cases introducer can be from other bank as well and the person
has to get his signature verified from that branch.
a. System should store information of introducer
b. Account opening date and other information of Introducer (if he/she is from other
branch) should be available from new system for verification on request.
c. Letter of thanks should be automatically printed or emailed from system. System
should keep track of the status of posting of letters.
1.1.1.11 Authorized Personnel Information

a. In case of personal account, this information is duplicated on the form where as for
other accounts directors or authorized personnel information is stored

a. The information regarding the authorized persons should be available in new system.
System should also cater partners, sole proprietor or director’s information.
1.1.1.12 Terms & Conditions

a. System should help to identify / restrict the user to the clause 5 “mentioned on form”
that is “Only one account in a particular type can be opened in the same name within
same branch.
b. This is also important in ref to answer queries from different investigation agencies
e.g. NAB, which is interested to know the accounts opened against a given NIC.
1.1.1.13 Know Your Customer

a. There are two Performa’s available for KYC:
i. For Personal / Individuals Accounts (annexure A)
ii. For Company / Corporate Account (Annexure B)
b. Know Your Customer Form is an interview based Performa. It is mandatory and its
filling is audited by the audit department.
c. KYC form includes information of customer accounts with banks other than ABL.
d. System currently has one flag, which is to be enabled to indicate that all the KYC
information is captured manually
a. This information can be made as part of main form, as most of the information is
already there, while missing fields can be incorporated within main form.
b. Signature should be made required for this, which can help in making information
authentic.
c. KYC information should be fed in the system.
d. KYC form should contain information of customer’s other accounts in other branches
of ABL.

e. In general practice, the form is filled by the bank staff on their own rather than asking
the account holder.
1.1.1.14 Cheque Book Issuance

a. Separate cheque book is issued for each type of account (Pak Rupee/Foreign
currency)
b. In normal procedure, cheque book is not issued at the time of opening of account. It is
provided later and a separate request form is used for this purpose.
c. Entries are made into “Cheque Books Issuance” manual register with
acknowledgement from receiver.
d. There are two options to get the cheque book issued:
i. In manual procedure, a hand written request is launched to COK, mentioning the
account numbers and Title of Account against which cheque book is required.
NIFT send these cheque books directly to branches after completing the
procedure with stationary wing at COK.
ii. The second option introduced recently is to raise the requisition through UniBank.
This requisition is received by Inventory department at COK and the cheque
books are then forwarded to respective branch through NIFT.
e. System maintains the records of last three cheque book series. If a cheque is
presented from a cheque book which is closed, then one active cheque book is closed
and related cheque book is activated by consulting the “cheque book register” from
where start cheque number and number of leaf information are taken.
f. To cancel multiple cheques within one cheque book, there is no range option
available to select multiple cheques; user has to do it one by one leaf.
a. System should provide the track of authorized person responsible for issuance of
cheque book.
b. System should keep track of all received and issued cheque books.
c. The instructions on the requisition slip should be compared with other banks and
should be standardized.

d. All the cheques not presented should be available for withdrawal in new system
1.1.1.15 Profit Calculations

a. In PLS A/C, profit provisioning is done monthly on projected rates, decided at the
start of the periods (starting from Jan & July).
b. Profit is credited to the accounts periodically at the rate decided by the Bank. There
may be a difference between the projected and actual profit rates.
c. Withholding tax (i.e. 10%) is deducted from the profit after it is credited to accounts.
d. For PLS saving accounts profit calculation is made on the minimum balance available
from 7th to end of each month. In case Account is closed before six months then the
client can claim the profit but it is generally not been claimed.
a. System should provide an inquiry on profit provisioned against accounts.
b. Pay order of deducted withholding tax amount should also be generated by system.
Tax chalan of withholding tax should also be auto generated.
1.1.1.16 Dormant and Inactive Accounts

a. If the account is not operative up till six months then it becomes Dormant. If the
account is not operative for 2 years its status is converted to “Inactive”.
b. Transactions in Dormant/Inactive accounts are accepted in system by use of certain
level (authority).
c. Both the statuses can be reverted back to “Active”. For this an application is required
from the account holder to complete the process.
a. System should provide reporting on dormant and inactive accounts.
b. After certain period, Zero balance accounts are automatically closed by UniBank.
Staff at branches is not very much aware of the process followed by the software in
this regard.

c. In general practice, if the account is dormant then the banker does not contact the
client. There should be a mechanism to inform customer in these cases.
1.1.1.17 Account Closing Process

a. To close an A/C, a written application is required along with the deduction / charges
of Rs.250.
b. Un-used leaves of cheque books need to be returned by the account holder. People
usually withdraw the entire amount and do not apply to close the account.
c. Account closing information is also updated in “Account Opening Register”
1.1.1.18 Deduction on Minimum Balance

A monthly deduction of Rs.50 is made from the accounts for maintaining average balance
less then Rs.10,000. This is done through the software and is not applicable on certain
accounts e.g. salaried, widows, pensioners and government employee’s accounts.
Following table shows picture of the data captured on account opening forms (package)
and incorporation of this information in existing system:
Account Opening Application Fields Status
Branch Code 
Date 
Account Number 
Term Deposit Number 
Type of Accounts 
Pak. Rupees Account 
Foreign Currency Account 
Currency 
Particulars of Accounts
Title of Account 
Initial Deposit 
N.I.C / Passport Number 
Occupation / Business 
Business Address 
Account Opening Application Fields
Residence Address 
National Tax Number 
Tel (Off.) 
Fax 

Tel (Res.) 
Mobile 
E-mail 
Particulars of Term Deposit
Amount Tendered for Term Deposit of 
Period 
Days 
Months 
Years 
Roll over for same period 
With / Without Profit 
Instructions for disbursement of Profit 
(Monthly, Quarterly, Half Yearly, Yearly, On Maturity)
Minor Info
Date of Birth of Minor 
Date of Attaining Maturity 
Name of Guardian 
Operating Instructions
The Account shall be Operated by 
Singly / Jointly 
Either or Survivor / any one singly 
Zakat Deduction 
Yes / No 
Address of Contact Person / Next of Kin
Name 
Address 
Telephone No. 
Special Instructions 
Other Bank Services to be used
On-line banking Facilities 
ATM / Debit Card 
Credit Card 
Safe Deposit Lockers 
Bank Account Statement (Monthly, Quarterly etc) 
Introducer
Signature 
Account No. 
Branch 
Banks 
Name 
Address 
NIC No. 
Tel (Off.) 
Tel (Res.) 

Mobile number 
E-mail 
Nature of Account (Individual, Partner Ship, etc.)
Personal Info of Authorized Persons to operate account
Name 
S/O, D/O, W/O 
NIC / Passport No. 
Date of Birth 
Nationality / Resident of 
Occupation / Business 
Name of Employer 
Signature / Thumb Impression 
Cheque book / Term Deposit Receipt Acknowledgement
Received Cheque book 
Received Term Deposit Receipt No. 
Date Customer Signature 
Account Opening Authorized by
Signature 
Name 
IBS No. 
Cheque Book Issued
Cheque Book No. From 
Cheque Book No. To 
Authorized Officer’s Signature 
Term Deposit Receipt Issued
Term Deposit Receipt No. 
Dated 
Authorized Officer’s Signature 
Acknowledgement
Name 
Signature of Bank Official 
Customer’s Signature 
Right Thumb Impression 
Left Thumb Impression 
Allied Cash +
First Name 
Sur Name 
Mother’s Maiden Name / Key Word 
Card # 

3 ATM Card Issuance

ATM issuance procedure contains following steps:
a. Customer fills in the additional Allied Cash + application Form. Except “mother
name” or “key word” all the information on this form is redundant to main account
opening form.(For ATM Card Generation Process, please refer to topic 4.4)
b. Once the card is received at branch, it is entered in the manual “ATM Issuance
Register”. The PIN information is received separately from card and usually with one
day’s delay
c. Customer approaches Manager Operation’s and acknowledges receipt by signing the
“ATM Issuance Register”.
d. In next step, customer approaches to Chief Manager for PIN Issuance and signs a
separate “ATM Pin Issuance Register”.
e. In last step the customer has to approach Manager Operation’s to get the ATM card
activated in system.
ATM Issuance
Entry in ATM Issuance
Branch
Dispatched to Dispatched to Register
ATM wing at COK Branch
ATM & Pin Generation ATM & Pin received

ATM Request
Form Filled
Manager Operations Issue

ATM and gets Ack. From
Customer (Update Register)
Chief Manager
ATM Card Activated by Gets Ack. From Customer in
Issues PIN
Manager operations PIN Issuance Register
a. System should hold complete ATM particulars of customer.

b. Procedure of ATM issuance should be hassle free like credit card, where customer
does not need to collect ATM card from branch. Phone banking or Internet banking
can be a thought for card activation and PIN Code generation as many banks are
using it now days.
c. Information on ATM form is same like account opening form except sur name and
mother name/key word. Missing information can be part of account opening form to
avoid dual information.
4 Cash Deposit
a. Deposit slips for PLS and Current Accounts are different (in color as well). There are
two portions of deposit slip, one portion is given to the depositor with cash received
stamp and the other is kept for bank record. In case of shortage of deposit slips,
photocopies are used.
b. All the cash deposit transactions are first written in manual register “Long Book for
Cash Deposit” and are then entered in to the system. For foreign currency accounts
“FC Long Book” is maintained
c. At the time of posting, a super code for transactions above Rs.10,000 is randomly
generated by the system, which is written on the voucher. This number is required at
the time of supervision of transaction.
d. Posting details are available on instrument while passing it through MICR (Magnetic
Ink Character Recognition) machine.
e. In case of mistake in filling the deposit slip i.e. wrong account number or account
title, bank retains the amount in “Sundry Account”. After that either the customer is
contacted or just waited to claim the amount. Amount is credited to account after
getting an application and a photocopy of counter part of deposit slip.

Cash Deposit
Entry made in Verification of A/C &
Long Book Particulars
Customer Fills in Customer Manual update

Deposit Slip Handover Deposit
Slip & Cash
Entry in Sundry A/C Register
No Yes
Incase of person is
not available
Posting in
Customer A/C
Amount > Rs.10,000 MICR Printing on

Yes
Deposit Slip
Supervision No
a. Different deposit slips for Current and PLS Accounts can be made single (this
practice is being followed in other banks).
b. After introducing MICR, there should be no need to emboss stamps on instruments
like deposit slips and cheques.
c. Customer should leave counter when all system entry is done and a printing is made
by MICR, in this way long book can be discontinued.
d. Carbonized paper can be used for deposit slip to avoid double writing on counter
folio.
e. Due to absence of “Automated Token System”, usually a mess is created at teller
windows. Token system can help people to approach counter on their turn. Likewise,
utility bills counter can be different from general operations.
f. Limit of supervision entry can be enhanced.
g. By bringing the deposits related data feeding in real time mode, “Sundry Account
Register” can be discontinued.

h. Seating arrangements at cash counters should be such that document movement can
be made easy till supervision step.
5 Cash Withdrawal
a. Cheque is presented at teller window. The instrument is first verified by teller and
then by MICR machine, which helps in identification of fake instruments.
b. Cheque is then verified from the system for “availability of balance”, “signatures”
and operating instructions if any. Instrument is then put in MICR to print posting
details.
c. Transaction is posted in the system. In case amount is equal to or higher than
Rs.10,000, transaction is supervised by another officer.
d. Withholding tax is deducted for amounts above than Rs.25,000, which is calculated
manually at the moment.
e. At the time of cash receipts and payments, denomination details are written on the
back of instrument which is used for the verification of the amount.
f. Transaction is written in the “Cashier Payment Long Book”. For foreign currency
accounts, a separate “FC Long Book” is maintained

Cash Withdrawals Instrument is valid

for Transaction
Verification Account Verification
Customer Presents Instrument - By Teller

Balance Available
at Branch Counter - By MICR
Signature
Yes
No
Entry in Cheque Return

Instrument Returned Register Entry in Cashier
to Customer Long Book
Supervision
Yes
Amount >
Customer A/C Rs.10,000
No
Debited
Cash payment System Posting & MICR

to Customer Printing On Instrument
a. System should calculate withholding tax charges of cheque amount more than
Rs.25,000 (or any other applicable tax). In case of unavailability of balance in
account, provision to record the transaction should be there in system, so that the
amount should be auto deducted on availability of the balance.
b. In principle cash payments to customer should be made after transaction is supervised
in system.
c. Seating arrangements at cash counters should be such that document movement can
be made easy till supervision step.
5.1 Cheque Dishonor

a. In case of cheque dishonor, there is a memorandum of reasons to attach with the
cheque while returning it back to the presenter.
b. To record the returned cheque transaction and to get its acknowledgement from
customer “Cheque Return Register” is maintained. This also helps to record details of

deducted charges against dishonored cheques. Cheque return charges are Rs.200. per
instrument.
System should maintain cheque return details like instrument number, date, amount,
return charges and reason.
6 Physical Cash Management
6.1 Cash Management at Branch

a. Every branch has certain limit approved for cash in hand which is insured as well.
Excess cash is transferred to main / controlling branch (Napier Road in this case). As
a practice minimum foreign currency is also maintained at branch. In case of any
inward clearing or withdrawals, foreign currency is arranged from main branch.
b. In case of excess cash retained at branch, a letter to regional office or directly to
insurance company for insurance coverage is written.
c. Within branch, both foreign currency and Pak rupee cash is placed in main safe,
located in strong room. Details of the amount taken In and Out are recorded each time
in a manual register “Cash In/Out register” with denomination details. Customer
Service Manager is responsible for cash in / out record and for reconciliation of
physical cash kept in main safe.
d. Daily cash reconciliation record is maintained in “Cashier Memo Book” with
denomination details. For reconciliation of foreign currency “FC Cashier Memo
Book” is maintained with currency and denomination details.
e. “Cashier Memo Book” contains information of cash closed on each day in following
details:
i. Unsorted Cash
ii. Sorted Cash (Issue able cash, Non - Issue able cash)

6.2 Cash Transfer

a. Every branch has got a limit approved and insured for retention of cash. In case of
shortage or excess of cash, the main branch is informed on phone to arrange
transportation (send / receive) of cash. during transportation, cash in-transit is also
insured.
b. Cash sent to main branch is categorized in two heads i.e. Sorted and Un-sorted.
Different stamps are used to identify both categories of cash.
c. “Cash in-`Transit” is credited during transfer and debited same day on receiving
advice from controlling branch. Its details are recorded in manual register “Cash in
Transit Register”.
Cash Management At Branch

Update
4 Day End Cashier Memo
3 Book
Main Safe
Cash Out
Cash In
Monitoring
Entry in Cash In/out

Teller Counter Register
Cash
Pak A/C updated
2
Cash Shortage
Telephone or Advice along
Branch Fax to Main Branch with Cash Received at Entry in Cash In-Transit
Branch Through Phoenix Register
1
Access Cash
Advice with Cash details Entry in Cash In/out

Call to Main Branch Register
Handed Over Phoenix
a. System should treat physical cash available within main safe as “inventory”. All In
and out transactions should be recorded in system so that physical cash can be auto
reconciled in proper denominations at end of each day. In this case “Cashier memo
book” and “Cash In/Out Register” can be discontinued

b. During cash transfer, cash in-transit transactions should be recorded and advices
should be generated through the system so that manual advices and “Cash in Transit
Register” can be discontinued.
c. Cash transfer should be made through system request rather to make a phone call or
fax to controlling branch. In this case proper documentation can also be maintained.
6.3 Cash Management at Main Branch

Main branch (Napier Road) is “Cash Chest” branch for Lahore and neighboring cities.
This branch is responsible to deliver cash, in case any branch request for cash shortage
and collects cash if any branch have excess cash than approved limit. This branch is also
responsible for transactions with SBP and other banks.
It covers 70 branches for its services. Cash transfer arrangements are made with Phoenix
security agencies. Currently branch has four vehicles, provided by Phoenix to serve all 70
branches.
1.1.1.19 Cash Transfer to Branches

a. Branches use fax or make a telephone call to main branch for cash requirement. If
amount is above than 0.5 million, then a counter signature of regional head is also
required.
b. Request details are maintained in “Intimation Register” with date and time.
c. “Cash Payment/Receipt Register” is maintained for cash transfers.
d. Due to shortage of vehicles Cash Chest Manager makes a route for cash delivery
(normally four routs to cover Lahore). Separate bags are maintained for each branch.
A seal is applied on each bag by Phoenix people and seal number is noted on
shipment document. Shipment document have three copies (one for main branch, one
for phoenix and one for receiving branch)
e. Van can carry maximum 200 million in a trip as per instruction of Phoenix. If more
than 200 million has to be transferred then main branch informs Phoenix and also to
insurance agency.
f. Private vehicle can not be used for cash transfers as per instructions

1.1.1.20 Cash Collection from Branches

a. In case of excess cash, branches make a telephone call to main branch (and security
agency, in certain cases) to send vehicle for cash collection.
b. Shipment document along with cash is received at cash chest and respective branch is
informed telephonically on receiving of cash. Pak account advice is sent to branch
through courier next day.
c. For cash in wallet “Cash Chest Book” is maintained with denomination details.
d. Main branch sorts the cash before submitting it to SBP. 15 cash sorters are dedicated
to this exercise.
e. “Cash Sorters Signature Register” is maintained with denomination details for cash
given and taken from sorters.
1.1.1.21 Cash Transfer to SBP and Reconciliation

a. Transactions related to clearing accounts with other banks, SBP penalties and
government institutions are made through SBP account.
b. “Cash Chest” can have maximum 150 million cash in wallet. Excess cash has to be
transferred to SBP. In case excess cash could not be transferred to SBP, information
has to be passed on to COK and insurance company.
c. “Cash in Transit” account is used during cash transfer to SBP and is credited to SBP
account on receipt of advice from SBP. “State Bank Register” is maintained to record
transactions with SBP.
d. At day end or next day morning account statement is received from SBP and
transactions are reconciled with register.
6.4 NIFT Operations

a. Main branch is also responsible for inward and outward clearing operations with
NIFT. An office is maintained at NIFT premises to coordinate the operations.
b. Printed advices are provided by NIFT to coordinating office from where these are
mailed to respective branches.
c. Fund Transfer to other banks is done by main branch through SBP account.

a. Cash Request should be from system in form of email or workflow. In this way
“Intimation register” maintained at main branch can be discontinued.
b. System should handle all accounting entries and advices made during cash transfer. In
this way movement of manual advices can also be eliminated.
c. Seeing the sensitivity of Cash Chest, security can also be enhanced by introducing
CCTV and RFIDs so that movement of irrelevant personnel can be tracked.
d. If cash is sorted by SBP then 35 rupees per packet is charged by SBP. This cost is
higher than sorting it in house. To reduce this cost branches should be advised to sort
cash before sending it to main branch. Cash sorting machines can also be used at
main branch to facilitate this process.
e. ABL should devise a procedure to collect clearing data digitally and upload it into
system as NIFT is providing data electronically to some banks.
7 Bills
Demand draft
- Pay Order
- Deposit at Call (DAC)
- AB Rupee Travelers Cheques
- Telegraphic transfer / Mail transfer
1.1 Demand Draft

Demand draft is an instrument which is normally used in intercity transfer of funds.
“Foreign Currency Demand Draft” can be issued in any applicable currency, which is
normally used for overseas transfer of funds. Any account holder or non-account holder
can request for DD. This instrument is valid for 6 months from the date of issuance. “DD
Issued Register” is used to record issued instruments. On expiry, instrument’s issue date
can be extended on client request by bank. DD can be cancelled or stopped for payment
(Detail in next section).

1.1.1.22 DD Payable
a. Entry is made in “DD Payable Register” on the receipt of advice and payment date is
written on presentation/payment of Instrument. Pak account is used for transfer of
funds.
b. For account holder Rs.100 or 0.05% (whichever is higher) is charged. For non-
account holder Rs.150 or 0.1% (whichever is higher) is charged.
1.1.1.23 DD Issuance
a. DD request slip is filled by customer and cash is deposited at cash counter. This slip
is forwarded to concerned person to make instrument. In case of cheque, direct
approach is made to relevant person for DD issuance.
b. Three DD formats are used in ABL with different colors.
Demand Draft <= 1000
Demand Draft <= 5000 and >1000
Demand Draft > 5000
There are two methods for instrument issuance:
1.1.1.23.1 Online Advice

a. Online advice for DD is made in two steps,
i. “DD Issue Account” is credited and cash or customer account is debited in
UniBank.
ii. DD payable account of responding branch is credited and DD issuance account of
originating branch is debited.
b. The only deciding factor for the success of online transaction is the health of the link
with drawn-on branch. IBR DD is written on the instrument for the identification of
instrument for online transfer.
c. In case DD advice is not transferred through online, a manual advice is sent to the
branch and reversal entry is made in UniBank to reverse the effect of online
transaction. Instrument is made manually as printing facility is not available in
existing system.

1.1.1.23.2 Manual Advice

a. After handing over the instrument to customer, manual advice is posted in system and
sent to the drawn-on branch.
b. Test Code is applied which is an authentication mechanism used by bank on every
kind of inter-branch advice (debit / credit), having amount equal to or greater than
Rs.100,000.
c. Test code is a sum of two numbers which are derived separately by manager and
accountant by adding up certain parameters. Test code is decoded by the receiving
branch to authenticate the validity of instrument. The detail of parameters/segments
used in test code generation is as follows:
For Accountant For Manager
Amount Amount
Date Fix Number
Variable Number Variable Number
1.1.1.24 Cancellation
For cancellation of instrument, customer submits an application along with original
instrument mentioning the reason of cancellation and release from payee. Postage charges
and Rs.100 are charged from customer as cancellation charges. Pak account of drawn-on
branch is debited.
1.1.1.25 Duplicate
In case of lost of instrument, customer can request the Bank for stop payment against that
DD. In this case bank verifies that the DD is not yet paid by drawn-on branch. Fax or
phone is used for getting confirmation of stop payment. Indemnity bond from the
customer is also required. Duplicate DD is issued with same number after receiving
charges Rs.200. “Duplicate DD” is also mentioned on instrument.

1.1.1.26 Balancing
Purpose of balancing exercise is to identify outstanding instruments against which funds
are received but not paid by the branch. Balancing exercise is conducted monthly for DD
payable at branch. ”Balance Book” is maintained for this purpose.
Demand Draft Issuance Process

Verify connectivity with
the Drawn on Branch for
online transaction
Prepare
Customer fills in Deposit Cash Approach to DD Issuance
DD Manually
Request Slip at Counter Officer with Deposit Slip
Test Code Applied No Yes

(Incase amount > Rs. 100,000)
Dispatch Advice to Prepare Advice
Drawn on Branch Manually
Handover
Instrument to Update DD Issuance IBR Applied Online Credit to
Customer Register Pak Account
a. System should have the capabilities to maintain complete particulars, printing of
instruments, online transfer of funds to drawn-on branch and auto reconciliation or
balancing at month end.
b. System should facilitate to verify the status of instrument from drawn-on branch
before duplicate issuance of instrument, using online retrieval of information. At the
moment phone call or fax is used for these verifications.
c. Concept of e- Branch is under discussion among ADC, Cash Management and SBP.
Idea is to introduce DD or banker’s cheque, payable at any branch of bank. In this
case e-Branch has to be used as drawn-on branch and access to this virtual branch is
to be provided at every branch.

1.2 Pay Order

Pay Order is an instrument which is usually used for same city (local) transfers. Credit
cash/transfer voucher is used as slip for pay order and at some places DD application
form is also used. P.O. validity time is six months, which is extendable by bank
1.1.1.27 PO Issuance
a. A separate program for issuance of pay order is used partially at some branches. In
case of manual issuance of P.O., information is maintained in “PO Register” and
accounting entries are posted in relevant GL accounts of UniBank.
b. In case of system generation, GL accounts are auto updated. Branches are using dot
matrix printers to print P.O. but in most of cases, instruments are made manually, due
to printing problems.
c. Charges of Rs.50 are charged from account holders and Rs.100 from non account
holders.
Customer submits an application along with original instrument mentioning the reason of
cancellation. Cancellation charges are Rs. 100.
1.1.1.29 Duplicate
In case of lost of instrument, customer can request the Bank for stop payment against
that P.O. In this case bank verifies that the P.O. is yet not paid by branch. Indemnity
bond from the customer is also requested, after that Duplicate P.O. with same instrument
number is issued by paying additional charges Duplicate issuance charges are Rs.150
a. There should be a specific P.O. application form where details related to P.O.
particulars including name, address, phone # and NIC can be captured.
b. There should be a printer dedicated for P.O., DD and other instruments printing (due
to adjustment reasons).

1.3 DAC (Deposit at Call)

a. DAC is a non transferable and non negotiable instrument valid for life time, which is
usually used for tenders or bids participation. Cash held against DAC is considered as
branch deposit.
b. An application form along with credit voucher is required to be filled by the customer
before issuing DAC. GL entry is made to get an update in branch affairs.
c. The terms and conditions for cancellation and stoppage are much strict as compared
to DD or PO.
d. Charges of Rs.50 are charged from account holders and Rs.100 from non account
holders.
An application along with original instrument and release or letter from concerned
department is required. There are no charges on cancellation of DAC.
1.1.1.31 Duplicate
a. For duplicate issuance of DAC, following documents required from customer:
i. Indemnity bond
ii. Copy of F.I.R.
iii. News paper Advertisement
iv. Authority letter from concern department (N.O.C)
v. Validation from legal advisor
b. Branch is not directly authorized for issuance of duplicate DAC and requires an
approval from controlling office.
c. There are no charges on issuance of duplicate DAC.
a. System should have capability to capture detail of DAC product. Moreover, like all
other instruments, printing facility for DACs should also be there.

1.4 Rupees Travelers Cheque (RTC)

a. RTC product is out dated and maximum worth of one RTC is reduced to Rs.10,000.
by SBP.
b. Additional information is required from customer on issuance of RTCs of amount
equal to or greater than Rs.100,000. SBP has imposed certain rules under which
information of the customer is captured and sent to SBP for purchases of RTCs worth
equal to or greater than Rs.500,000
c. This product is not supported by system and like all other instruments it is issued
manually.
d. Charges of Rs.10 per leaf or Rs.50 (which ever is higher) are charged.
e. Customer can get it en-cashed from any authorized branch of the bank. To reimburse
funds concerned branch has to lodge claim to COK (ABRTC wing).
1.1.1.32 Duplicate
Stop payment of RTC is a lengthy process; the information has to be conveyed to all
authorized branches through COK provided it is not already en-cashed. On confirmation
of stop payment, duplicate instrument can be issued. Duplicate issuance charges are
Rs.250 per leaf.
1.5 Telegraphic Transfer (TT) / Mail Transfer (MT)

This facility was used when online facility was not available. TT is used when a customer
desires to transfer funds from one branch to another on urgent basis. A manual advice is
sent through fax or courier service to responding branch.
2 Clearing
We can divide the clearing subject into two segments:
- Local Clearing
- Inter City

2.1 Local Clearing

Clearing of instruments within the city is done through local clearing. There are three
types of local clearing:
- Routine Local Clearing
- Same Day Local Clearing
1.1.1.33 Routine Local Clearing

1.1.1.33.1 Inward
a. Instruments and summary (transfer scroll) are received in sealed bag from NIFT.
Acknowledgement is provided by the bank to the NIFT person who visits branch in
morning.
b. Transfer scroll consists of details of inward instruments and previous day outward
clearing instruments.
c. Detail of inward clearing instruments is recorded in a manual register “Inward
Clearing Register” and is matched with transfer scroll sent by NIFT. Each instrument
is then posted in the relevant account in the system in clearing mode, which decides
the fate of these instruments.
d. For realized instruments, branch credits PAK account of main branch (in this case,
Napier road) and debits concerned payee account accordingly
e. An advice is made mentioning the total amount of realized instruments and handed
over to the NIFT person along with unrealized instruments. Advice is sent to main
branch through NIFT.
f. Unrealized instrument are also recorded in “Cheque Return Register”
g. Main branch transfers funds to other banks through SBP accounts, while for ABL
branches, funds are transferred through PAK account.
h. In case of any mistake resulting in wrong realization of instruments, branch sends
debit note to for getting funds back from the collecting branch. If the payment has not
been made then the concerned branch returns the funds in form of pay order. If the
cash is with-drawn then it is very difficult for bank to get it back.
i. There are no charges on inward clearing but for unrealized instruments bank charge
Rs.200 per instrument.

Inward Clearing Process

NIFT
Branch
Update Inward Clearing
Register
Record Keeping
Courier/Dispatch
Instruments & Printed

List Instrument is
SBP
valid for
Transaction?
A/C settlement No
Entry in Cheque Return

Controlling Branch Register
Yes
Manual Advice & Debit Customer A/C

Returned Cheques Credit Pak A/c of Main Branch
NIFT
1.1.1.33.2 Outward
a. On receipt of instruments these are grouped into local, intercity and same day clearing
types.
b. Entry in “out ward clearing register” is made from the pay-in slip.
c. At receiving of instruments special crossing and clearing stamps are stamped on the
instrument and endorsement is done on the back of instrument to avoid its misuse, in
case of misplacement.
d. Entry is made in system in clearing mode to provide a float credit in respective
account. This float credit is not available for withdrawal till the instrument is realized
and finally credited to the account. System does maintain this information to keep
track of outward clearing transactions. This also helps in verification of account title
and status before sending instruments for outward clearing
e. Summary (transfer scroll) is made manually from instruments where as register entry
is made from pay-in slip. It is intentionally done to verify the difference in pay-in slip
and instruments, if any.

f. Branch hands over the instruments and summary in a sealed bag to the NIFT person
who collects it in afternoon. In case of any delay, instruments can be delivered by
sending a person to NIFT office
g. After two days (in general practice), NIFT person delivers the fate of instruments
along with an advice and unrealized instruments in a sealed bag.
h. After getting fate of the instruments, credit is provided in UniBank through pay-in
slip. Bank deducts the charges against unrealized instruments.
Outward Clearing
Outward Clearing
Branch Manual Register Data Entry
Instruments Instruments
Received Grouping
Return to
Customer
Manual Transfer
Scroll
Preparation
Transfer Scroll &

Instrument Handed
Un-realized Over to NIFT
Instruments
NIFT
Processing
Update Outward Advice along with
Clearing Register Customer A/C unrealized Instruments
Credited
1.1.1.34 Same Day Local Clearing

a. Same day clearing is opted on client’s requirement and is valid for instruments worth
Rs.500,000 and above. Only nominated branches are authorized for same day
clearing.
b. Incase of same day outward clearing, NIFT person collects instruments in morning. In
case of any delay, instruments can be delivered to NIFT office before 10:00 am. After
processing at NIFT, instruments are sent to destination branch till 12:00 pm.
c. On receipt of same day inward clearing, fate of instruments is decided at that very
moment. An advice is prepared and handed over to NIFT person along with
unrealized instruments

d. Separate register is not maintained for same day inward clearing where as information
of same day outward clearing is maintained in “Outward Clearing Register” using a
separate portion.
e. To identify same day clearing transactions from routine clearing transactions, same
day clearing transactions are posted using “Transfer Mode”
f. Rest of the same day clearing process is same as of routine clearing process.
g. There are flat charges of Rs. 150 per instrument for same day out ward clearing.
2.2 Inter City Clearing

1.1.1.35 Inward (Intercity)
a. Inter city mode of clearing operates only in those cities where NIFT is available. At
the moment NIFT services are available in 10 major cities of Pakistan.
b. Instruments and summary (transfer scroll) from the local NIFT are received city wise
in separate packets at the branch by 11:30 am. Intercity clearing advice along with
unrealized instruments has to be returned at the same time
c. There is no separate register maintained for intercity inward clearing. This
information is directly entered in to the system in transfer mode.
d. The rest of the process is same as for same day inward clearing.
e. Charges for intercity outward clearing are 0.2 % and NIFT Charges areRs100 per
instrument. These are deducted by the sending branch (collecting bank). Intercity
register is maintained to record transactions of charges.
1.1.1.36 Outward (Intercity)

The process is same as of local outward clearing, except that the instruments are sent in
separate packet for each city. System does not maintain information for inter city outward
clearing.
Possible Improvements (over all clearing process):

a. After posting the inward and outward transactions in system, summary (transfer
scroll) / advice should be generated from the system.

b. Bank and branch codes should be same as used in NIFT. At the moment system is not
maintaining bank/branch code information. Due to these limitations, clearing system
is being used in few branches whereas most of the branches are following manual
process.
c. In outward clearing, where data for instruments is already fed, interface should be
made user friendly to supervise realized instruments to credit funds in respective
accounts. System should help to mark unrealized instruments while others should be
auto credited to the respective accounts.
d. There should be separate sub modes available in system for different types of clearing
i.e. same day and inter city.
e. System should generate reports to facilitate clearing related inquiries so that manual
registers maintained for this purpose should be discontinued.
f. System should help in calculation and deduction of all applicable clearing charges.
g. In case of any urgent requirement system should facilitate exceptional outward
clearing of instruments which are entered as a batch against one date.
h. ABL should devise a procedure to collect clearing data digitally and upload it into
system as NIFT is providing data to some banks.
3 Outward / Inward Bills for Collection (OBC/IBC)
3.1 OBC / IBC

a. Instruments like PO, DD and cheque are operated through clean collection where the
facility of NIFT is not available and online transaction for that city is not possible.
b. In each city / region, one of the branches is nominated as main branch. Within the
bank instruments are sent directly to branch and in case of other bank these are sent to
main branch of ABL in that city / region.
c. Before sending these instruments for collection, special crossing and OBC stamps are
stamped on the instrument and endorsement is done on the back of instrument.
d. In case of within bank transactions, branch credits outward bill for collection and
debits outward bills for receiving. An entry is also recorded in “OBC Register”. On
receiving advice the collecting branch will reverse the contra liabilities and credit the

customer account by responding IBCA. On receipt of OBC, the responding branch

provides the credit to originating branch through PAK account and debits the
customer account. An IBCA is also sent to originating branch through courier. On
amount equal to or greater than Rs.100,000, test code has also to be applied on IBCA.
e. For other banks, instruments are sent to the main branch in that region or city. Main
branch launches the instrument in local clearing or arrange collection of funds
through PO, DD or in person. On realization of instrument, main branch sends IBCA
to originating branch. Unrealized instruments are returned back to originating branch
along with “cheque return memorandum”. In case of unavailability of branch in that
region, OBCs can also be sent directly to the branch of other bank. In that case DD is
used to transfer the funds back to originating branch.
f. Minimum Rs.50 or 0.20% of the amount and maximum Rs.5,000 is charged on these
bills.
a. Balancing for OBCs is done on monthly basis.
a. System should maintain complete information of IBC/OBC. In ideal case online
facility should be guaranteed in all branches, which is the best path for these inter-
branch transactions. Further, the proposed online inter-bank transactions can also
helps to facilitate customers and to avoid the lengthy process of transactions through
IBC / OBC.
b. Collection time for OBC is 72 hours. System should generate alerts to both branches
for the outstanding OBCs / IBCs
c. System should maintain floating credit in case of OBCs in a similar way it is
available in outward clearing.
d. System should provide online credit to concerned branch of realized clearing IBC.

4 Transfers
Transfers are used where the branch needs to give credit to one or more account(s)
debiting other account against an instrument, advice or an instruction. For example salary
transfer of SUI Gas employees against an instruction System support is available
a. While transferring funds, present limit of 8 entries in one batch should be improved.
Ideally there should be higher or no limits on the transactions in one batch.
b. Facility of e-banking should be introduced so that customers can directly upload the
request for transfer of funds. Further, facility for printing of instruments can also be
extended using standard BAI II format used by banks world wide
5 Online Transactions
Following types of transactions are handled through online facility:
i. Cash Deposit
ii. Cheque Encashment
iii. Funds Transfers
iv. Balance Inquiry
v. Account Statement
a. In online mode, account holder can withdraw up to Rs.500,000 per instrument by
him/her self and the limit is Rs.25,000 for person other then the account holder.
Where as in case of cash deposit it is Rs.5,000,000 per transaction.
b. Online slip is filled by the customer mentioning the transaction type listed above. Slip
is deposited along with the cash/instrument to the cashier for further processing.
c. In case of cheque, system usually takes a minute to load signature card to verify
signatures. After data entry each transaction needs to be supervised on the same
terminal where the transaction is posted.
d. Cash deposit transaction is done in three steps
i. System entry and supervision
ii. Generation of advice number of originating branch

iii. Generation of document number of responding branch

e. In case of online cash deposit, supervision of transactions must be made by the
responding branch to make funds available for withdrawal through ATM or online.
f. In some cases entry is through from originating branch and the document numbers are
generated for both branches but the transaction is still not available at responding
branch. If the customer does not inquire (of the balance) in the above mentioned case
then branch comes to know of this problem during reconciliation (done twice during
the month), in this case manual advice is called from responding branch
g. Inquiry against advice number is available in system to confirm transactions, if link is
available.
h. Entry can be reversed in UniBank until system generates document number of
responding branch; otherwise system has to reverse entries through online.
i. Online register is maintained for online transactions, purpose of this register is to
keep track of charges against online transactions. That also helps in MIS reporting.
j. Online charges are waived-off for account holder maintaining average balance of
Rs.500,000. System provides the average balance of each account during online
transactions.
k. Bank has started accepting clearing instruments in the branches through online
processing facility. A procedure has been devised to credit collection account (non
checking current account specially opened for this purpose) on realization of
instrument. After that funds are transferred in to the customer’s account through
online by debiting the collection account.
l. In case of online banking state bank doesn’t permit to debit the limit account.

Online Transfers (Deposit)

Connecting
Customer Branch
Customer Proceeds to
Online Desk with Slip
Slip & Cash Keep Trying

Online Slip Deposited at Counter
Filled
No Yes
Customer A/C No Account

Credited Verification
-Transaction in system
-Transaction Supervision
Supervision from -Doc. No. of Originating Branch
Responding Branch -Advice No
-Doc. No. of Responding Branch
Yes
Online Transfers (Withdrawal)

Connecting
Customer Branch
Verifies the Instrument
and Slip Particulars (MICR) Proceeds to
Yes Online Desk
Keep Trying
Slip & Instrument
Online Slip
Deposited at Counter
Filled
Instrument Back No No
to Customer
Instrument given
Back to customer
Yes
No
Update Online
Transaction in
Charges Register Remote Account Signature
Customer A/C
& Balance Verification
Payment to Yes
Customer

a. Online slip requires improvements in its contents and layout, as it is quite
complicated due to its support of multiple transaction types. Carbonized slips can be
used to avoid duplicate writing on counter folio.
b. System should allow supervision of online transactions on a separate terminal.
Currently it can only be done from the terminal where the transaction is posted.
System should allow the user to supervise transactions in a batch format rather than
doing it one by one.
c. There should be a two way commit or roll back in case of link failure so that data
consistency and integrity can be ensured at both sending and receiving ends.
d. Backup links or multiple sites should be available so that if one site goes down, data
can be sent or received from other site. Perhaps in new core banking system we could
have multiple backup links
e. The responding branch should have notification or alert generated at their end to
know that there are transactions available for supervision.
f. In case of account statement through online it is only available for current half year.
Account statement should be available at least for current and previous half year.
6 Term Deposit
Term deposits are profit & loss sharing based fixed deposit accounts and these deposits
are accepted in multiple of Rs.1,000. There are two categories of term deposit:
- Short Notice Deposit Receipt (SNDR)

i. Seven Days (from 7 to 29 days)
ii. Thirty Days (from 30 days onwards)
- Term Deposit Receipt (TDR)
6.1 SNDR
a. It is a non transferable, non negotiable and non accumulative account. Account
opening form is same as for all other types of accounts.

b. On opening of SNDR account, SNDR receipt is issued to the customer mentioning

the period (either 7 or 30 days).
c. The rate of SNDR is dependant upon the amount and days of deposit.
d. The profit is calculated according to the terms of SNDR which is usually paid on
projected rates at maturity.
e. For each SNDR instrument an account is opened in system. If customer needs
multiple instruments then he/she will have to open equal number of accounts
6.2 PLS Based Term Deposit Receipt

Period for this type of deposit is one month to 10 year. TDR has a separate register “TDR
Register”. There are total 10 terms and each term has a separate”TT” in UniBank. Profit
provisioning for these accounts is made on monthly basis and profit is paid on half yearly
basis or as per instruction of customer. The rate of TDR is dependant upon the amount
and period of deposit.
a. System should handle SNDR profit provisioning and its payments.
b. System should maintain all particulars of SNDR.
c. System should have option to issue multiple instruments against single account.
6.3 Premium plus Account

Premium Plus Account (PPA) is further divided in to two types:
i. PPA Operational account
ii. PPA Term deposit account
1.1.1.37 PPA Operational Account

a. These are operated like current accounts having profit facility. Zakat deduction is also
applicable on these accounts. Profit is calculated on daily product basis as per slabs /
rates (detail of slabs and rate is available in a circular)

b. System provides a separate utility to calculate the daily product with single rate
applicable for the period/month. If the rate changes during the month, break up has to
be calculated manually. Profit provisioning and its distribution is done manually in
the system
c. In case of wapda they have multiple accounts (and even in one or more branches of
the Bank), these accounts should be treated as group/project accounts for profit
calculation and other inquires. Information of total exposure is usually gathered by
making telephone calls to other branches having the group accounts.
a. System should help in profit provisioning and its distribution to accounts. System
should also cater the rate change during the month and application of different slabs
during the month.
b. System should help in determination of profit after summing up or accumulating the
deposit available in all those accounts which belongs to a group customer. Customer
centricity can help to meet all these requirements in new system.
1.1.1.38 PPA Term deposit

a. PPA Term Deposit was launched to attract large deposits of corporate clients. At
present, the minimum amount for term deposit is 50 million and the period is 30 days
and 90 days. The same TDR instrument is used for PPA term deposit.
b. An account is opened for each term deposit in system. As general practice, that
account number is written on instrument to identify the account. A manual register
“PPA Term Deposit Register” is also used to maintain record of the instruments.
c. Profit provisioning is done on month end and is recorded in “PPA Term deposit
Register”. Profit is paid at encashment or maturity of the instruments
a. System should maintain the record of PPA term deposit instruments. Further, profit
provisioning and its payment at the time of maturity or encashment should be handled
by the system.

b. System should have option to issue multiple instruments against single account.
6.4 Allied Profit Plus

a. To attract deposits, bank has recently launched a product “Allied Profit Plus Deposit
Account” having different slabs and rates.
b. The average balance for each month is used for the purpose of profit eligibility of
rates / slabs and profit is paid on monthly basis.
a. System should help in profit provisioning and its distribution to accounts.
b. System should also cater the rate change during the month and application of
different slabs during the months.
6.5 Premium Term Deposit

a. This product was introduced to expand customer base. It is a similar product to PPA
Term Deposit, having different slabs of amount and period (i.e. available on circular).
The same TDR instrument is used for Premium Term Deposit.
b. An account is opened for each term deposit in system. As general practice, that
account number is written on instrument to identify the account. A manual register
“Premium Term Deposit Register” is also used to maintain record of the instruments.
c. Profit provisioning is done on month end and is recorded in “Premium Term Deposit
Register”. Profit is paid at encashment or maturity of the instruments.
a. System should maintain the record of these instruments. Further, profit provisioning
and its payment at the time of maturity or encashment should be handled by the
system.
b. System should have option to issue multiple instruments against single account.

7 Inter Branch Transactions (Pak Account)

a. Each branch and controlling office is working as an independent accounting unit. All
transactions among these units are routed through Pak Account.
b. All the manually originated and responded Pak account entries have to be supervised
for preparation of daily “Pak Account Extract” before day end processing. This is not
applicable on online transactions.
c. Auto generated entries of Pak account, fed through clearing mode have to be
separately added up for finalization of Pak account extract, as the particulars (branch
code, transaction code and control number) of these entries are not being fed at the
time of auto generation.
d. Pak Account is reconciled after every 15 days. A statement is sent by COK to every
branch (accounting unit) mentioning all the un-reconciled entries. Appropriate
remarks are sent against each entry. In case, if an entry is kept un-reconciled for more
than one month, a penalty is imposed by SBP. In case of Lahore region, the
reconciliation process is also handled by a designated person at Napier Road branch.
e. Entries for payment / receipt of interest on Pak Account are posted directly by COK
in respective heads of GL accounts of branches.
a. System should prompt for the supervision of pending PAK account entries before
preparing the “Pak Account Extract” and day end processing.
b. System should provide online credit to concerned branch of realized clearing IBC,
cash in transit etc. so that manual advices can be minimized. In case, where manual
advices are unavoidable due to certain reasons, these should be printed from system.
c. Pak Account inquiry (for recon purpose) should also be available on control number
and date.

8 ATM Operations
a. Before cash placement, available cash in machine is recounted and cleared in system
and then new cash is fed into the machine. Information of cash is fed into ATM with
denomination details. An entry is also made in UniBank.
b. A statement is generated from ATM, named as “super”. This report provides details
of available cash in machine. Cash balance slip is generated from ATM with
denomination details. Type wise detail is available in following heads:
i. Cassette
ii. Rejected
iii. Remaining
iv. Dispensed
v. Total
vi. Last cleared (cash)… date for last cash update in machine
Following types of cash is used in ATM machines:
i. Type 1 500
ii. Type 2 1000
c. “ATM Cash Balancing Report” is generated from UniBank system on daily basis
after business hours. This report helps in balancing the actual cash in ATM with
UniBank system. Copies of “super” reports generated by ATM before and after cash
placement are also attached with the balancing report. The “ATM Balancing Report”
is signed by officer and customer services manager. This report provides the detail of:
i. Date
ii. GL ATM cash balance
iii. Status of Balance (B - Balance, U - Unbalance)
iv. Own customer on other ATM
v. Other customer on Own ATM
vi. Actual cash in ATM
d. In case of problem in reconciliation, COK handles its corrections.
e. Only sorted cash can be fed into the machine. Effort is required by the bank staff due
to unavailability of new notes. Some banks are now reversing the maximum limits on
ATM machines due to same problems.

f. All the transactions in ATM are printed on a roll. This roll is taken out daily and
pasted onto a register named as “ATM Scroll” register. This roll helps in keeping
track of all the transactions and their status.
g. Captured card can be returned to the card holder after getting the signatures on the
“ATM Card Return Register”. List of “card captured” is also generated by the
machine.
Possible improvements:
a. The information printed on a roll should be uploaded in a database so that reporting
can be generated without pasting these slips on to a manual register
b. Due to limited availability of new and sorted cash some banks are now reversing the
maximum limits on ATM machines.
9 Locker Operations
Fours types of lockers are available for public on rent. This facility is only available to
account holders.
Type (Size) Rent / Annum Key Deposit

Small 1000 3000
Medium 1500 3000
Large 2500 4000
Extra large 4000 4000
a. An application package is signed by the customer, containing following information:

i. Request for locker
ii. SS card
iii. Memorandum of letting of safe
iv. Authority letter for recovery of rent from account
b. Applications forms are filled in a binder. “Locker Register” is maintained to record
all particulars, locker no, key no, rent, security and refund details

c. Rent is recovered in advance or at the commencement of period i.e. quarterly, half

yearly, yearly or as per agreement with customer.
d. Key Deposit is also payable in advance. A receipt is provided to customer against the
security.
e. “Register of visits” is maintained to record the date, time and signatures of visiting
person.
f. In case of loss of key, the customer will be asked to report the loss in writing and
request for breaking the locker and replacing it with new one at his/her own cost.
Breaking charges are recovered as per actual or minimum of Rs.2000 from the
customer.
Locker Issuance
Locker Register
Updated
On Approval
Locker Application Filled Key Deposit paid

& Signed by Customer & Receipt issued
Documents Filled
In Binder

Locker Operations
Signature &
Key # Matched
Yes Proceeds to Locker

Room Along with CSM
Customer Approaches Entry in

Branch Visit Register
No
Both Apply Keys
to Open locker
Customer Operates
Locker Locked
Locker Individually
by Customer
a. System should maintain information about the lockers and their owners in detail.
b. Locker requirement should be made part of main account opening application / form.
In case someone requires this facility after getting the account opened, this
information should be updated in the system. So that the locker information should be
linked to the particular account.
c. In case locker operating authority is given to any other person by the account holder,
additional SS card (only for the purpose of locker operation) should be scanned and
uploaded in the system against the account.
d. System should report the vacant lockers, due and overdue list for renewals so that
proper correspondence can be made with customers.
e. Instructions are pasted on lockers for overdue payments of rent; these can also be
resolved by provision of prompts or alerts through the system. System should help in
terms of validity of locker for payment of rent at the time of people visiting to operate
the lockers, and prompt for the overdue rent payments.
f. Concept of digital lockers can be looked into with some digital authorization process.

g. By bringing the lockers and visitors information into databases, manual registers can
be discontinued.
10 Utility Bills
a. A separate “Long Book” is being maintained for each type of utility bill (i.e.
Electricity, Sui Gas, WASA and Telephone),
b. Utility bill is received from customer at counter. Amount and bill details are entered
in “Long Book” and amount is also written on utility bill by cashier.
c. “Long book” along with utility bill is given to officer, who applies receiving stamp
and do system entry and sends it back to cashier. Counter part of bill is handed over
to customer.
d. In case the bill payment is made through cheque/instrument drawn on same branch,
the instrument has to be separately posted in UniBank and after passing of instrument,
the entries are recorded in long book and system. Counter part of bill is handed over
to customer.
e. In case the bill payment is made through cheque/instrument drawn on other Bank, the
instrument is sent in clearing and after the realization of instrument; the entries are
recorded in long book and system. Counter part of bill is handed over to customer.
f. Entries of long book and the system generated reports are reconciled and manual
credit vouchers for each type of utility bill are posted in UniBank on next working
day and funds are transferred online to respective main collection branch of each
department (SUI GAS, WAPDA, PTCL)
g. The cash safe for utility bill is separate from main safe.
h. Bank charges are Rs.10 per bill from each department except WASA.
i. In case of SUI gas the charges are deducted before transferring funds. For WAPDA
and PTCL, summary of bills collected is sent to regional office by each branch at
month end and after compilation the regional office directs the respective main
collection branch for transferring the commission amount to each branch. Manual
advices of commission are sent to each branch by main collection branch.

j. As module used for utility bills has no integration with UniBank, so staff has to make
dual entries to update it.
Utility Bills Long Book with Utility

Bills Forwarded to
Officer for Stamps
Due Date &
Customer
Amount Verified
Entry in Long Book

Utility bill and
Maintained for each
Payment handed
type of Bill
over to teller
Receipt Handed
over to Customer
Next morning cash Cash placed in Dept. wise consolidate

placed in main safe separate safe GL entry in UniBank
System Entry
a. An integrated module should be available in new system for utility bills collection.
Existing module used for utility bills has no integration with UniBank, so staff has to
make dual entries to update it.
b. Arrangements with departments should be made for payment of bills through online
banking, phone, SMS, credit card, internet or even use of barcode technology can also
be given a thought.
11 Prize Bonds
a. “Prize bond Register” is used to record the sale and purchase of prize bonds. Separate
page for each denomination is used in register.
b. Prize bonds are sent along with cash to main branch in routine

c. In system, GL account for national prize bonds is updated. Denomination and serial
numbers of prize bonds are not fed into the system
Possible Improvement
System should provide complete information including denomination and serial number
for prize bonds so that the record of prize bonds falling during shut period can also be
maintained and manual register can be discontinued
12 General Accounts
12.1 Sundry Account

a. Sundry account is maintained to record the transactions having mistakes, for example
incorrect account number or account title on deposit slip, access cash received,
parking of certain credits temporarily.
b. To reverse the erroneous transactions parked in the sundry account, an application
along with photocopy of the counterpart of the deposit slip is sought from the
depositor. Other credits parked in Sundry Accounts are reversed at appropriate time.
Control on the sundry account reversal entries is more important for audit.
c. ”Sundry Register” is maintained to record the transactions of Sundry account.
d. Balancing exercise is conducted each month and a monthly statement of outstanding
entries in sundry account is prepared manually and is sent to the regional office.
a. System should cater to sundry account handling providing some means of knocking
off entries so the outstanding entries can be identified any time.
b. At the moment commissions receivable against LG are parked in Sundry account.
Separate account should be maintained for L/G commissions recoverable.

13 General Processes
13.1 Daily Vouchers

a. There are four types of vouchers:
i. Credit Cash
ii. Debit Cash
iii. Credit Transfer
iv. Debit Transfer
b. All vouchers of a day are sorted by voucher and account type. These are sewed in
form of bundle.
c. “Voucher Register” is maintained by mentioning the number of vouchers in each type
in a day.
d. “Voucher Movement Register” is maintained to record the movement of vouchers
from strong room.
a. Detail of daily vouchers should be available from system. At the moment, the batch
entries are considered as single voucher by the system, which is a bottleneck for using
the report for recording and reconciliation purpose. This can help to discontinue the
“Voucher Register”
b. By bringing the Voucher movement information into the system, the “voucher
movement register” can be discontinued.
13.2 Advance Deposit and Advance Rent

a. Depending on the contract, advance deposit in terms of security (for building,
telephone, Sui-gas etc) is recorded. In case of advance rent “Advance Rent Register”
is being used at branches to record the detail of rent paid in advance and its
subsequent deduction and balance.
b. Advance deposit receipts are kept in separate file for record of all advance deposits
made to different agencies and are recoverable in future.

13.3 Executive Visits

“Executive Visit Book” is maintained for executives wherein they fill the four pages of
information to record different parameters related to branch performance. After that a
report is sent back to the branch for comments and compliance.
Although this practice is discontinued since last two years, but in case of requirement,
there should be a system to record all these details instead of manual book
13.4 Peon Book

“Peon Book” is maintained to record and get signatures of receiving person on the Dak
sent to different offices through messengers (peons) by hand.
13.5 Stamps in Hand

a. Receipts and Issues of stamps are recorded in the “Stamps in Hand Register”. These
are accounted for in General Ledger at the time of their purchase or sale. A separate
page for each stamp type is used in register.
b. Balancing exercise is conducted on monthly basis and is recorded in “Balance Book”.
Auditors also verify the physical stock with the ledger balance.
Manual record of stamps inventory should be maintained in the system.
13.6 Inward / Outward Dak

Inward Dak is recorded in “Inward Dak Register”. Outward Dak is recorded in “Outward
Dak Register”

There can be a system to record inward and outward dak details so that manual registers
can be discontinued.
13.7 Book of instructions

a. Book of instruction was printed in March 1997. Volume 1 of this book covers general
banking. The remaining process reference to advances and trade finance were
supposed to be made. Later on the next volumes of manual were not published
a. Some processes have been changed with passage of time but the book is not updated
accordingly. This book should be available online for reference on any subject.
Mechanism to keep this manual up to date should also be there.
b. One idea is that all kind of manuals should be available in SPP
13.8 Online List of Branches and Controlling Offices

a. Branch list with telephone and fax numbers should be available online with updated
information of people responsible.
b. Sorting and searching both alphabetic and branch code wise, should also be available.
13.9 Circular’s Index

An index of circulars was also made in past. List and numbers of circulars was “grouped
subject” for the convenience of reference.
Possible Improvement:
a. Index and all the circulars should be available online for the ease of reference

b. SPP/”Exchange Server Public Folder” access should be extended to branch managers

in future.
c. Intelligent searching capabilities should also be there to facilitate the user for
searching on any subject.
13.10 Office Orders

All office orders are either pasted or written on “Office Order Register” and signatures
from staff members are required on it.
To save time and unnecessary movement of registers, all office orders should be
circulated through email.
13.11 Inter Branch Signature Book (IBS/AS)

a. This manual book contains the list and signatures of all authorized personnel (IBS
holders). This book is printed and distributed to all branches and relevant agencies for
the sake of verification of signatories.
b. The changes (additions & deletions) are conveyed by means of circulars. Additions
are pasted manually on the same book and deletions are also marked there.
This book should be available on line. Searching should also be available on name and
IBS number so that manual verification of signatures can be avoided.
13.12 Keys Handling

There are different types of keys:
Keys Key Holders
Strong room gate keys Customer service manager
Chief cashier

Main cash safe Chief manager

Customer service manager
Chief cashier
Small safe (for utility bills) Cashier (utility bills)

Utility bills in charge
Test keys Customer service manager

Bills in charge
Locker room gate keys Customer service manager

Chief Manager
Locker keys Customer service manager
a. The responsibility of each key is entered into the “Key Register” and receipt is
acknowledged by the receiving official and finally authenticated by the customer
service manager.
b. In case some person goes on leave, transfer or retirement, key’s responsibility will be
shifted to someone else by entering the keys transfer information in the same register.
System should help in maintaining this record of keys possession and some technology
like digital safe can also be used.
13.13 Inventory Management

a. “Security Stationary Register” is used to record inventory receipts and issuance,
balance of security stationary items. Receipt and Issuance is recorded with reference
of serial numbers.

b. “Stock of Stationary in Hand Register” is used to record stock and cost of all
stationary items. This cost is booked in UniBank GL on monthly basis.
Inventory valuation and its transfer to GL should be made by the system without any user
intervention.
13.14 Fixed Assets

Types of fixed assets are as follows:
i. Furniture and fixture
ii. Vehicle account
iii. Electrical equipment
iv. Computer and tele equipment
v. Long life computer equipment
a. “SFF – Safe, Fixture, and Furniture Register” is maintained to record all assets in that
particular category. It is mandatory that a separate register should be maintained for
each category of fixed assets.
b. Depreciation is calculated manually on periodical basis and communicated to COK
on yearly basis.
Fixed assets data and its valuation process should be transferred to COK where this
should be handled in a centralized way using Oracle fixed assets
13.15 Attendance Management

a. Staff members sign the “Attendance Register” on daily basis. This register is
supervised and signed by chief manager on daily basis.
b. “Leave Record Register” is maintained to keep record leaves of branch staff.
a. Leave record should be maintained with HR Wing. Monthly record of attendance/

leaves should also be sent and updated in HCM.
b. An online inquiry should be available for branch to refer leave balances details.
c. At the moment the leave record for executives is centralized at COK and for rest of
employees leave record is maintained at branches. This can be uploaded in to HCM
13.16 Expenses
Branch Expenses
a. Budget for each expense type is allocated by COK and communicated through
Regional Controller to each branch.
b. System doesn’t help in enforcement of these budgets.
a. Budget should be available online thru system for each type of expense. System
should also provide a comparison of limit availed and available, on requirement.
b. System should provide a notification on exceeding budget in any head.

Finances
Finances can be categorized into two types:
i. Fund based (FB)
ii. Non-fund based (NFB)
Customers can also be grouped into two categories on the basis of availed limit:
i. Corporate Customers (Availing 150 million and above)
ii. Retail Customers (Availing below 150 million)
a. Corporate customers are served by CIBG (Corporate Investment Banking Group)
having four regions in the country. Relationship Managers (RM) are responsible for
customer liaisons and credit application processing.
b. Retail Customers are served by CRBG (Consumer and Retail Banking Group) having
27 regions in the country. Chief Managers (CM) are responsible for marketing and
customer follow-ups.
c. Following is the list of products introduced by the bank from time to time, some of
these have become obsolete but still have overdue:
Serial No. Products
Working Capital Facilities
Fund based
1 Agriculture Finance/Revolving Credit Scheme
2 Running Finance/Temporary Over Draft/Sanction Over Draft
3 Cash Finance
4 Finance against IBP
5 Finance for Govt. Commodity Operations
6 Financed against Dishonored Bills (FADB) under Usance L/C (Inland)
Non Fund Based
7 Customer Liability on Inland L/C
8 Customer Liability for Local Usance Bills Accepted (LUBA)
Import Related Credit Facilities
Fund based
9 Finance against Imported Merchandise (FIM)
10 Finance Against Trust Receipt (FATR)
11 Payment against Documents (PAD) – Sight
12 Finance Against Dishonored Bills (FADB) under Usance L/C
Non Fund Based
13 Customer Liability L/C (Sight)
14 Customer Liability L/C (Usance)
15 Customer Liability for Foreign Usance Bills Accepted (FUBA)

Export Related Credit Facilities

16 Finance Against Packing Credit (FAPC-I, FAPC-II)
17 Finance Against Packing Credit (Own Sources)
18 Finance Against Foreign Export Bills
19 Foreign Bills Negotiated (FBN)
20 Foreign Bills Discounted (FBD)
Long Term Credit Facilities
21 Demand Finance (DF)
22 Fixed loan/Term Finance
23 Bridge Finance
24 Leasing
25 IDA Credit
Program Lending
26 Finance to Small Business
27 Overseas Employment Financing Scheme
28 Housing Finance
29 Self Employment Scheme
30 National Transport Scheme for Taxis
31 Computer Loan Schemes
32 Credit Card Finance
33 Allied Karsaz Financing Scheme
34 Demand Finance to Staff
1 Advances
a. An account of customer is opened in UniBank for each type of facility with a specific
TT. This also helps in enforcement of maximum limit as approved in sanction advice.
b. Transactions regarding disbursements and repayments of principal amounts are
recorded in this account.
c. Manual registers are maintained to record disbursements, payment schedules and
principal repayments for each type of facility like “Demand Finance Register”, “Cash
Finance Register” and “Running Finance Register” etc.
d. Single “Markup Receivable Register” for all type of advances is maintained to record
markup rates, markup repayment schedules, accruals and markup repayments.
Information against each facility is maintained on each page. To calculate the
aggregates of due payments or overdue payments manual calculations are made by
staff against each customer.

e. Different MIS reposts are sent to CAD, Regional Office and to COK. These reports
are made manually from these registers by branch staff.
2 Imports
We can divide this subject into following categories:
i. L.C (Sight, Usance)
ii. Inland L.C (Sight, Usance)
2.1 L.C Opening Process

a. L.C Form with all supporting documents is filled by customer.
b. An account of each customer is opened in UniBank for L.C with a specific TT to
reflect availed totals in general ledger. This also helps in enforcement of L.C limit as
approved in sanction advice.
c. If any customer has availed sub limits like (DOD, FATR etc), system does not
provide the facility to calculate aggregates of these sub limits. As a practice these sub
limits are manually added and are tallied with DAC approved limit for outstanding
amounts.
d. “LC Opening Register” is maintained to record LC number, customer, opening date,
commissions and amount. This information is again entered in “Payment Against
Documents (PAD) Register” with additional details like (Item, HSCode, insurance
and expiry date etc) related to that LC.
2.2 L.C Processing

a. On payment against documents “PAD Register” is updated and markup is calculated
manually.
b. “LC Lodgment Register” is updated when PAD occurs. This register is used for SBP
reporting.
c. In case customer fails to get documents released by paying funds in time then LC
sight is transferred to FIM (Finance against Imported Merchandise) or FATR

(Finance against Trust Receipt) if customer has these approved facilities, details are
noted in “FIM register” and in “FATR Register” respectively. If customer does not
have approved FIM facility then a forced FIM is created and details are maintained in
“Force FIM register”.
d. LC Usance is transferred to FUBA (Foreign Usance bills for Acceptance) if customer
fails to get documents released, details are noted in “FUBA Register”. After this a
temporary finance facility name FADB (Finance against Dishonored Bills) is created,
its details are maintained in “FADB Register”.
3 Exports
Export subject can be divided into following areas:
i. Export through collection
ii. Export through advance payment
iii. Export through L.C
3.1 Export Process

a. E-Form is issued for any type of export. Issuance record with serial number, customer
name and along with signature is maintained in “E-Form Issuance Register”.
b. “FDBC (Foreign Documentary Bills for Collection) Register” is maintained with
complete details when export is made through collection.
c. “Proceed Realization Certificate” register is updated when funds are released by
importer and are available to exporter.
d. “Advance Payment Register” is maintained if export is done on advance payment
basis.
e. “FBN (Foreign Bills Negotiated) Register” is used to record the export details when
is made through Letter of Credit (L.C).
f. Exporter can avail facility of FBD (Foreign Bills discounted) when export is made
through L.C (DA). “FBD Register” is maintained to record the particulars.

g. Foreign Bills Purchased is an approved facility for LC having minimal discrepancy in

documents. “FBP (Foreign Bills Purchased) Register” is maintained to record the
particulars of export when any exporter avails this facility.
h. Finance against Packing Credit (FAPC-I) is an approved facility having fund
arrangement by own source or re-finance facility from SBP. Two different registers
are maintained for this.
i. Finance against Packing Credit (FAPC-II) is also an approved facility. Details are
maintained in “FAPC-II Register”.
Possible Improvements
a. There should be a system to capable of handling all finances related requirements
including Term, Demand and Trade Financing. System should provide mechanism to
define or configure new products on different parameters.
b. System should also cater requirements like multiple loan facilities per customer,
feature to inter-link loans for tracking purpose, markup calculation for multiple loans,
limit controls, loan re-scheduling and customer payment behaviors,
c. System should maintain complete information of L.C, like Performa invoice, products
list, shipment details, opening bank, reimbursing bank, advising bank, negotiating
bank, insurance and expiry details etc. It should also facilitate to convert LC to any
other fund base facility like FIM, FATR, FADB etc. In this way many manual
register can be discontinued.
d. System should generate alerts on expected shipment dates, expiries and on shipment
arrivals so that customer can be contacted in time.
4 Credit Application Package

a. Credit Application (CA) is used to avail any type of facility from bank and is also
used to collect customer financial and non financial information. CA package is used
for following:
i. Credit Renewal
ii. Credit Amendment

iii. Credit Extension

iv. Credit Enhancement
b. CA contains following sheets having different set of information:
i. Exposure Summary
ii. Facility Summary
iii. Sanction Advice
iv. Basic Information Report
4.1 Exposure Summary

Exposure summary is used to collect information about applicant’s business segment,
control unit, extended unit, obligor’s risk rating, obligor’s stability, tenor profile,
classified exposure and group exposure.
4.2 Facility Summary

a. Facility summary contains information of facilities (FB and NFB) availed by
group/company from bank (ABL only).
b. In case security documents are shared by more than one bank then details of other
bank’s facilities are also collected.
4.3 Sanction Advice

Sanction advice contains obligor’s existing and proposed facilities, facility purpose,
pricing and terms. It also contains details of security description against existing and
proposed facilities. After the signature from approving authority, this document becomes
a credit approval.
4.4 Basic Information Report (BIR)

BIR is used to collect obligor’s information from internal and external sources like
company back ground, main products, production capacity, shareholders, management,

group concerns, bank lines, CIB, market worth, yield and classification history etc.
Separate BIR is maintained for each obligor.
Following table represents information being captured on CA Form, its source and
incorporation status in existing system:
Credit Application Form Source Status
Sheet-1 Exposure Summary
CA Type 
CA # 
Date of Review 
Date of Last Annual Approval 
Group / Obligor Customer 
Extending Unit 
Relation Ship Manager 
Business Segment Customer 
Approval Level 
Next Expiry Date 
Group / Obligor Code CIB 
Control Unit 
Obligor Relationship Since System 
Legal Entity Customer 
Obligor name Customer 
ORR (Existing, Proposed) COK 
Total Existing Limits System 
Relation Ship Strategy 
Group Exposure Summary
FB
Existing System 
Proposed 
Net Inc / Dec 
NFB 
Existing System 
Proposed 
Net Inc / Dec 
Investment
Existing System 
Proposed 
Net Inc / Dec 
Total 
Existing System 
Proposed 

Net Inc / Dec 

Stability Criteria
Prudential Regulations Breach 
Covenant Violations 
Security Compliance Certificate (SCC) Not Attached 
Qualified Auditor's Opinion Customer 
Change in Auditors Customer 
Overdues 
Significant Change in industry outlook 
Major Risk event impacting the Obligor 
CIB reflects over due / Default CIB 
Negative Market Checking 
Credit Policy Breach 
Group / Obligor Classification Restructuring History 
Recommended By 
Approved By 
Sheet-2 Facility Summary - Other Group Obligor
Group Name Customer 
Group Code CIB 
CA # 
Control Unit 
Date of Review 
Next Annual Renewal Date 
Obligor Name Customer 
Obligor Code CIB 
NTN Customer 
Extending Unit Customer 
Industry Type Customer 
Industry Code 
Facility # 
Facility 
Existing Limits FB System 
Existing Limits NFB System 
Tenor 
Expiry System 
Pricing 
Outstanding Regular System 
Outstanding Classified / Over due 
Sub Total 
Group Total 
Signature Relationship Manager
Sheet-3 Sanction Advice
Group Name Customer 

Group Code CIB 

Control Unit 
CA # 
Date of Review 
Next Expiry Date 
Obligor Name Customer 
Obligor Code CIB 
Extending Unit
NTN Customer 
Industry Type Customer 
Industry Code 
Obligor Facility Summary
Facility # 
Facility 
Existing Limits FB System 
Existing Limits NFB System 
Tenor 
Expiry System 
Pricing 
Outstanding Regular System 
Outstanding Classified / Over due System 
Total System 
Facility Terms
Fac # 
Facility 
Purpose 
Price (Exist.) 
Price (Prop.) 
Commission 
Tenor (Exist.) 
Tenor (Prop.) 
Expiry System 
Repayment System 
Procedural Requirement Manual 
Sheet-4 Security Description
Fac. Cov. 
Existing 
Proposed 
Charge Amount & Ranking 
Margin (%) Proposed 
Margin (%) Required as per bank policy/ SBP which ever is
higher 
Collateral Value 

Last Stock Inspection Date 

Observations 
Last Legal Review Date 
Observations 
Recommended By 
Approval Level 
Additional Comments / Loan Covenants 
Sheet-5 Basic Information Report
Obligor Name System 
Address System 
Tel. No. System 
Date of Establishment 
Business Segment 
Legal Entity 
Borrowing Relationship Since 
Date of Review 
Background / Products Customer 
Shareholders Customer 
Management Customer 
Affiliated / Group Concerns Customer 
Bank Lines CIB / Customer 
Credit Checking from CIB CIB 
Market Checking 
Yield 
Classification History 
a. New CA format is being used by CIBG. How ever CRBG is still using the old format.
These formats should be accompanied by proper guidelines and defined list of values,
which should be followed by all branches to ensure the standardization.
b. Business segment is an important field on which many SBP and management reports
are dependent. Branches and RM’s should have the pre-defined list of values, so that
at the time of filling CA, proper selection can be made. During scrutiny the validity of
this information should be assured.
c. If CA is initiated by branch where finances of Flagship Company are parked, in that
case branch has to collect finances details of obligor from other branches manually.
Similarly if CA is initiated by other than control unit, the branch has to send CA to
control unit for verification, comments and consent of respective RM. System should

help to generate consolidated report on all facilities availed by group/company from

any branch of bank.
d. Currently branches are compiling data manually to calculate yield, tenor profiles,
classified exposures etc. System should help to calculate all these rather to make it
manually.
e. Existing facilities information is gathered from UniBank system and is manually
written on CA after making certain calculations. System should generate facility
details like tenor, pricing, expiry date, outstanding, overdue and classified exposures
against individual company or at group level.
f. As BIR information is volatile and need to be updated on certain intervals, system
should prompt against each obligor regarding information expiry so that updated data
can be collected.
g. System should provide analysis on management ranking, yield and bank charge rating
on provided data based upon defined parameters. System should also be able to
calculate the security cushion available on existing securities.
h. The role a portfolio management division should be advisory so that they can guide
RMs and CM from marketing point of view. They should conduct comprehensive
R&D on areas like change in industry outlook and areas for investment.
5 Credit Approval
After compilation, CA along with supporting documents is forwarded to appropriate
approving authority (CRBG, CIBG). Following is the credit approval structure used in
CRBG and CIBG:
Security Types Descriptions are elaborated in section (2.5.1)
LEVEL-1
Credit Approval Authority Branch / Chief Manager jointly with the Regional
Head(RH) CRBG
Single borrower / Group Total exposure up to Rs. 1 (M) of which agriculture

Exposure Limit finance not to exceed Rs.0.5 (M)

Security Fully secured by Type I
LEVEL-1I
Credit Approval Authority RH,CRBG jointly with Manager, Regional Commercial &
Retail Risk (RCRR)
Single borrower / Group Total exposure up to Rs. 10 (M) of which agriculture

Exposure Limit finance not to exceed Rs.5 (M)
Security Type I and type II
LEVEL-1II
Credit Approval Authority Manager RCRR jointly with group head, CRBG
Single borrower / Group Total exposure up to Rs 25 (M)

Exposure Limit
Security All Security Types
LEVEL-1V
Credit Approval Authority Group Head, CRBG jointly with Head, Commercial &
Retail Risk (For Borrower in CRBG)
Regional Head CIBG jointly with Head, Corporate & FI

Risk (For borrower in CIBG)
Single borrower / Group Total exposure up to Rs. 75 (M) for a single borrower and
Exposure Limit Rs. 150 (M) for a group – CRBG
Total exposure up to Rs. 200 (M) for a single borrower

and Rs. 400 (M) for a group – CIBG
Security Term Loan to be sanctioned up to 50 % of credit authority
All Security types
LEVEL-V
Credit Approval Authority Group chief, CRBG / CIBG jointly with group chief,
RMG
Single borrower / Group
Exposure Limit Total exposure up to Rs. 400 (M) for a single borrower
and Rs. 800 (M) for a group
Security
All Security Types
LEVEL-VI

Credit Approval Authority Group chief, RMG jointly with President
Single borrower / Group Total exposure up to Rs. 600 (M) for a single borrower
Exposure Limit and Rs. 1200 (M) for a group
LEVEL-VII
Credit Approval Authority President jointly with Chairman, Risk Management &
Credit Policy Committee
Single borrower / Group Total exposure exceeding Rs. 600 (M) for a single
Exposure Limit borrower and Rs. 1200 (M) for a group
5.1 Security Type Descriptions

Type I Cash / Near Cash
100% cash Margin
Lien over deposit (LCY / FCY) Receipts / Certificates issued by ABL
Lien over financial guarantees issued by ABL
Lien over deposit certificates / receipts of banks with a minimum rating
‘A’ (by an external rating agency) with in exposure limit allocated by
FI division with formal lien marking by the issuing institution.
Lien over registered DSC’s / SSC’s / government securities issued by
banks, national saving centers or SBP with formal lien marking by the
issuing institution
Pledge / lien over FEBCs / Bearer / Registered US $ bonds subject to
verification & formal lien marking by the issuing bank.
Export documents under irrevocable usance LCs of top 1000 banks
after receipt of authenticated acceptance advice.
Documents under inland LCs of scheduled banks with in the exposure
limits allocated by FI duly accepted by the LC opening bank.
Security for Agriculture Finance

Mortgage of rural property through pledge of Agri Pass Book

Joint registration of vehicles
Mortgage of urban property.
Type II Pledge / Fixed Assets
Pledge of goods imported under Sight LC issued by ABL (excluding
public / custom bonded warehouses).
Pledge of locally procured commodities used in seasonal financing
(Raw Cotton, Cotton Bales, Cotton by-products, rice paddy, rice wheat,
sugar) that is fully adjusted at the end of the season.
1st / 1st PP Mortgage on land and buildings – excluding cultivated rural
land not being used for industrial or commercial purposes (even if held
for secondary collateral)
Lien over deposit certificates / receipts of banks with a rating below ‘A’
(by an external rating agency) with in exposure limit allocated by FI
division with formal lien marking by the issuing institution.
Type III Fixed Assets / Current Assets / Shares / TFCs / Others
1st / 1st PP hypo charge on current assets
1st / 1st PP hypo charge on plant and machinery
Pledge of stocks imported under non ABL LC / finished goods
Pledge of other goods
1st / 1st PP mortgage on land and building (rural areas)
Finance guarantee of top 1000 banks functioning abroad or scheduled
banks in Pakistan with in exposure limit allocated by FI division
Shares / TFCs
Personal guarantee for agricultural finance.
Any other security not specified above will be approved at a minimum
of Level-V

Credit Approval & Disbursement

Approving
Branch Regional Office
Authority
Approval Approval Note Copy

Courier Yes
CA and Supporting
Documents No Original
Prepare BFL & Entry
in BFL Register
Copy
Disbursement
to Customer CAD
Documentation & BFL
Verified by CAD
for DAC Issuance
Documentation Send to Branch
System Process
for A/c. Opening Branch
Yes Customer
Acceptance
No
a. To minimize credit approval processing time, work flows should be implemented.
This can also help to track changes made at any level of approval. CA initiation by
CIBG can be handled electronically as they have enough hardware resources
(computers and laptops), while by providing hardware resources to branches, CRBG
people can also do it electronically.
b. System should provide the status tracking of CA so that customer can be informed
when required.
c. All original documents are in the custody of CAD while branches only have copy of
these. Digitization of these documents can make it easier for branches to access these
electronically.
6 Credit Administration Department (CAD)

CAD functions starts when a facility is approved by approving authority. There are eight
CAD offices in ABL and their main responsibilities are as following:

- Disbursement Authorization Certificate (DAC) Issuance

- Security Documents Safety/Storage Management
- MIS (CIB, Management and Monitoring)
- Vigilance (hypothecated and pledged stock inspection)
6.1 Disbursement Authorization Certificate (DAC) Issuance

DAC empowers customers and employees to avail approved facilities. The process of
DAC issuance is as follows:
a. For new facilities, CAD receives an “Approval Note” from approving authority and a
BFL (Banking Facility Letter) from regional office against approved credit
application. The contents of BFL are compared with “Approval Note”. In case of any
discrepancy CAD informs regional office for its correction.
b. BFL is sent to branch/RM for customer acceptance. As a matter of practice a “Charge
Form” being signed by customer is taken in advance, which is basically an acceptance
from the customer on all terms and conditions and is sent to CAD for review.
c. On customer acceptance, CAD advises branch/RM to collect required documents
from customer and these documents are also vetted by legal advisor, if required.
d. Original documents are delivered to CAD office in person for review. If any shortage
or discrepancy is found in the documents, branch is asked for correction. “Master
file” is maintained to keep security documents in original
e. DAC is issued and sent to branch/RM which empowers branch for the disbursement
of funds against approved facility. “DAC Issuance Register” is maintained to record
the details.
f. Photocopies of all the documents along with approved DAC are sent to Risk
Management Group.
g. For renewal of existing facilities, a SCC (Security Compliance Certificate) is sought
from CAD for verifying the validity of the security documents. After issuance, a copy
of SCC is filled in “Master File” for record purpose.
h. In case of employee finances, DAC is issued to HR and related security documents
are maintained by CAD on separate register.

a. CAD should have a list of standard documents approved against each type of facility.
This list should also be available with branches. This can help in reducing the time
period spent on fulfilling the discrepancies.
b. Proper use of software systems (SPP, Microsoft exchange server etc.) and use of
terminals at each desk can help and facilitate the fast processing of CAD functions
c. Use of technology like SPP, emails and work flows not only can save the time but
also helps to curtail the charges of courier.
d. Role of CAD can be enhanced in terms of collection of documents and also to handle
the legal documentation which branches / RM are doing at the moment. Reason being
it is a specialized back office job and should be dealt by specialized people like CAD
which is more appropriate department to handle this function. This can help in
improving the time required in this process, this can also help branches to become
more productive in their routine banking operations.
6.2 Security Document Management

a. Original documents are received from branch in person. Listing and
acknowledgement is provided on DAC document for branch and customer record.
b. These documents are placed in “Master File” and are kept in “SAFE”, available with
CAD by marking reference number on each file.
c. In case any authority or person requests to review these documents, a “Document
Movement Register” is maintained.
a. System should facilitate to define document expiries if required and should give
prompt on due dates so that customer can be contacted for new or updated
documents.

b. System should keep record of insurance expiries of each customer/facility and should
prompt when any insurance policy expires. Similarly, if any insurance company is de-
listed from panel, system should be able to list all cases of that company so that
customers can be contacted for new policies.
c. Document listing should also be available online so that branches can view it when
required and can follow customers regarding missing or incomplete documents.
d. Digitization of these documents can help to view these documents online by any
authority.
e. All the cabinets used at the moment are not fire proof. Safe room should have proper
fire fighting and security system.
6.3 MIS Reporting

This wing is responsible to collect different types of reports from branches and passes on
to central CAD office at COK. Some of the reports and their reporting frequencies are as
follows:
Sr.# Report Name Compiled For Frequency
1 Credit Admin Update (11 Statements) COK Monthly
2 Past Due Obligation COK Bi-weekly
3 Financing Against Pledge of Shares COK Weekly
4 Statements of Limits Approved (4 Statements) COK Monthly
5 Share’s Daily Report COK Daily
6 Credit Information Bureau CIB Monthly
7 Electronic Credit information Bureau CIB Monthly
8 Stock Inspection Report COK Monthly
9 Party wise consolidated statement of stock report COK Monthly
On receiving of reports from regions and branches, key punch operators feed this data
into excel files and CIB related data in CIB system. Soft copy of these reports is sent to
COK for further processing.
a. Due to lack of central database, branches manually compile all reports and send to
regional office and CAD. During this process data becomes invalid and this also leads
to omission of information. System should facilitate to generate all types of

monitoring reports on real data so that proper actions can be taken. CAD should have
access on CDB (central database) to meet these requirements.
b. As a practice past due obligation report is called from branches. On the basis of this
information, CAD conducts follow up with branches for recoveries. System should
maintain principal payment schedule and markup schedule so that customer can be
approached well in time and overdue can be eliminated.
6.4 Vigilance Officer

Role of vigilance officers is to inspect hypothecated and pledged stocks for allocated
branches. This activity has also been outsourced to different companies. Responsibilities
of vigilance officer are as follows:
a. Vigilance of pledged stocks on quarterly and hypothecated stocks on half yearly
basis.
b. “Report 63” is collected from branch which contains customer details, customer
facilities, hypothecated and pledged stock details and outstanding amounts.
c. Make visit schedules for outsourced agencies, verification of their reports and their
submission.
d. “Stock Inspection Performa” is used during inspection by vigilance officer. Main
contents of this Performa are as follows:
i. Detail of existing limits /amounts outstanding
ii. Detail of stocks hypothecated / pledge inspected
iii. Quality of stock item
iv. Evidence of ownership
v. Adequacy of insurance
vi. Quality of warehouse storage quantity
vii. Adequacy of fire protection arrangements
viii. Adequacy of protection from theft / burglary
ix. General comments / observations
x. Submission of stocks stored at factory premises from client

e. Vigilance officer manage visit schedules of outsourced agencies in such a way that
one company can not do vigilance of a customer consecutively two times.
f. Visit details, visiting agency and visiting personnel record is maintained in
“Hypothecation and Pledge Registers”.
g. In addition to this, visits are made by following authorities:
i. Branch level Monthly Inspection
ii. Audit Department (two in a year)
iii. Vigilance Officers visit (quarterly for pledge / half yearly for Hypothecated)
iv. Out Sourced Companies (Monthly for Pledge / Quarterly for Hypothecated)
h. An outsourced agency charges Rs.1500~2000 per visit and Rs.4 per kilometer and is
claimed from customer.
a. Vigilance officer gets updated data by approaching at branch where facilities of that
customer are parked and then he visits customer’s premises for inspection. This cost
lot of time and traveling. System should facilitate to get updated data of each
customer in CAD using CDB.
b. If the stock is pledged by multiple banks then there should be a mechanism by which
all banks can inspect the stock simultaneously.

Home Remittance Cell (HRC)

ABL has arrangement with 21 foreign banks and exchange companies throughout the
world. Home remittance cell located at Saima Trade Tower (Karachi) is responsible to
deliver remittances to the beneficiary. Normally 500 transactions are processed in a day
(250~300 DDs and 250~300 online).Beneficiary need to have a valid account in any bank
to receive remittance.
1 Remittances Processing
a. Remittances are delivered through two channels:
i. SWIFT
ii. Tested E-mails Messages
b. SWIFT messages are received at COK and are delivered manually to HRC once in a
day. Email messages are received at (ablrtc@gmail.com). Email messages are tested
and are decoded by HRC staff before further processing.
c. Funds are delivered to beneficiaries by two channels:
i. Online Credits
ii. Demand Draft
d. In case beneficiary has account in ABL, remittances are transferred to beneficiary’s
account using online facility. Funds are transferred to payee branch using PAK
account. In case of unavailability of online facility, an IBCA can also be sent to the
payee branch.
e. In second case if the beneficiary is of other bank, following steps are performed for
issuance of DD:
i. Credit voucher for DD issuance
ii. Entry in DD Issuance Register
iii. Instrument preparation
iv. Covering letter for beneficiary bank
v. Credit advice to payee branch
vi. PAK account transaction

f. DDs are made manually by branch and are dispatched to beneficiary via courier. “DD
issuance register” is maintained to record the particulars of DD issued.
g. Additional information is required from remitter if remittances are above $10,000.
h. To encourage remittances, government of Pakistan pays a rebate of 25 Riyals per
transaction to remitter. By improving deliveries bank can be in position to capture a
major market share. Depending upon the pricing agreed with bank or agency about
five Riyals are claimed against each remittance transaction.
i. COBOL based software is used to punch all data to generate reports for SBP.
Home Remittance Cell

SWIFT External A/C
Centre Processing Other Banks
1 Courier as batch
DD Preparation
Remitter on ABL-HRC
Dispatched to
SWIFT
2 Internal
Remittance through Gmail Accounts
Tested e-mail Msg. Inbox
Connectivity with
Beneficiary Branch
Yes
Online Credit
To Account Beneficiary’s
Branch
Beneficiaries
Courier Prepare
No
IBCA
Customer
A/C credited
2 MIS Reporting
Following is the detail of reports submitted by HRC to different bodies:
Report Name Compiled For Frequency

Returns (Country wise, purpose wise) SBP Monthly
Management Reporting (Account wise, Agent Wise, FI division Monthly
Country Wise)
ADC Reporting ADC Monthly

a. System should support bulk file uploading of the SWIFT messages so that all data can
be uploaded electronically rather punching every transaction individually.
b. SWIFT department has provided consent on the possibility of downloading these
messages from SWIFT into the required format. This can substantially reduce the
work load and can increase the capacity of processing of HRC.
c. Concept of e- Branch is under discussion among ADC, Cash Management and SBP.
Idea is to make HRC and cash management transactions directly to this branch. Some
banks are using “Bankers Cheque” in place of DD. This instrument is payable at any
branch. ABL is also planning for the implementation of this instrument.
d. Financial Institution Division (FI) is responsible for arrangements and marketing with
foreign banks and agencies. They need to have a strong and well equipped back office
(HRC) capable to process entire transactions from all sources. Analytical view of
transaction should be available to FI. Centralized database for HRC and provision of
analytical dash boards for FI and ADC executives can help in fine tuning the process
and bringing further business
e. By introducing technology, remitter and beneficiary can be informed by providing
“Remittance tracking system” and SMS alerts. In this way services can be improved.
f. HRC is incurring an average expense of Rs.70,000 per month in terms of courier
expenses. This expense can be converted into an investment to improve
communication channels. This can help to cut the recurring cost and to improve the
efficiency of the process.
g. It is thought that if the above mentioned improvements are incorporated, then HRC
can handle twice or thrice the load of existing transactions, In fact FI has a lot of
business available but due to these limitations they are unable to process it.

Central Processing
- Nostro account Reconciliation
- Pak Account Reconciliation
- ABRTC
1 Nostro Account Reconciliation

a. “Daily Activity Report” for all nostro accounts is received through SWIFT from
corresponding banks and agencies. This report is received from SWIFT in hard copy
format and is punched into COBOL based software.
b. Data of responding branches for contra entries is received on floppy disk from
Treasury, and is uploaded into system.
c. System reconciles the entries of daily activity with contra entries based upon certain
criteria (Account number, amount etc.). Unmatched transactions are reported
separately by system, and reconciliation department follows the transactions until
their reconciliation.
d. In case of FOBC, funds are credited to nostro account on the presentation of
instrument. As per international law if instrument is bounced back then payee bank
can recall its funds within 21 days so FOBC funds are not transferred to beneficiary
account before 21 days. To record FOBC presentation and maturity dates “FOBC
Register” is maintained.
e. If FOBC is of bank having no arrangements with ABL, then instruments are
presented through any other bank or agencies with which ABL has arrangements.
SWIFT and fax messages are being used for follow ups.

Nostro Account Reconciliation

1
Treasury
Branch
Data through
Send Data Floppy
Data Upload in
System
2
SWIFT Reconciliation
Trade Tower
Processing
Sent in printed format
Nostro A/C activity
bank/agency wise
Reconciliation Dept.
Nostro A/C activity Punched in
Received from System
banks/agencies Follow up with
Un Reconciled Transactions
a. System should support electronic data transfer from SWIFT and from treasury to
central processing wing, so that manual intervention and delays can be reduced.
b. A script can help to translate SWIFT data into required format (SWIFT department
acknowledged that it is quite possible), rather central processing again punch data
into system. In this way duplicate effort and error margins can be eliminated.
c. There is no auto reconcile facility for nostro accounts. System should auto reconcile
on certain parameters (detail system study is required to explore these parameters).
d. Email communication among HRC and reconciliation departments (Nostro & Pak
Rupee) can help to reduce data transfer and reconciliation overheads.
e. System should be able to maintain maturity dates of FOBC and should prompt on due
dates, so that funds can be transferred to beneficiary on its maturity.

2 Pak Account Reconciliation

a. Data from CDB is uploaded to “Pak account reconciliation software”. System
reconciliation is done and unmatched entries are manually reconciled. Reports are
printed and sent to branches for balancing.
b. Transactions of amount 10 million and above are reconciled daily and branches are
intimated in case of any discrepancy.
c. SBP applies penalty on transactions being parked in PAK account more than 30 days.
a. PAK account reconciliation advices are currently sent through courier to branches.
These should be sent through email.
b. If any branch is offline then printed report of PAK account transactions are sent
through courier. Provision to send electronic data to central wing should be there.
3 Allied Bank Rupee Travelers Cheque

a. Central processing wing issues RTC Instruments to the branches on their request.
b. Branch en-cash the ABRTC and send these to COK. In case of lost, ABRTC wing
circulates information to nominated branches for stop payments. Encashment
summary is also sent by branch to ABRTC wing.
Advices for sale and encashment of ABRTCs should be automated in the system

Alternate Delivery Channels
1 ATM Card Generation

a. Separate ATM request form is filled by account holder at branch. Branches dispatch
this form to ATM wing located at COK for card generation.
b. On receiving of form, data is punched in excel sheets for record purposes and form
contents are verified in two steps.
i. In first step account title, CNIC number and address are verified with UniBank
account using CDB. If any information is incorrect then form is sent back to
branch for its correction.
ii. In 2nd step, inter branch signatures are verified using “IBS Book” and in case of
any mismatch, form is sent back to branch.
c. Verified forms are punched in TPS Software (Transaction Processing System,
Microsoft Access based). Pre Production Report is taken from the system for physical
verification with ATM form. After this cards are produced.
d. A report of printed card is sent to PIN code generation department. Pins are generated
using HSM (Host Security Module, Part of TPS). For security reasons, pins are
generated and dispatched one day later than the ATM Card.
e. After this data is provided to IT for upload to Phoenix server.

ATM Generation Process

Branch
Courier Yes Yes
ATM Form Entry in Excel at Form Contents

IBS Manual
send to COK COK Manual Verification
Verification
Dispatch Via Courier
Courier No No
Incorrect Information Data Entry

Upload to Phoenix No
Server by IT PIN Generation
Card
From HSM
Printing
Yes
ATM Card & Pin Verification
Card Verification
a. Most of the information which is punched into the system from ATM form is also
available in UniBank, there should be interfacing available in UNI bank so that
branches can enter data from the point of origination.
b. ATM wing should gather the requests for new ATM cards directly from UniBank and
upload it in TPS for card generation. This can help to discontinue dispatch of forms,
data punching in excel, manual verification steps and can make the process fool proof
and efficient.
2 Call Center
a. Third party software is used in call centre which is capable of call recording. An
ATM (Phoenix) terminal is also provided to verify the account related information.
b. Technology is sourced by ZRG where as man power is outsourced to Erwin tech

c. Complaints logging is manual and tickets are generated against each complaint where
some corrective action is required, these tickets are forwarded to concern
departments/branches for appropriate action.
d. ATM Card can be cancelled or blocked after verification, if any customer report for
lost.
a. Complaint Management System should be available at call center. Issuance
processing and monitoring of tickets should also be automated
3 SWIFT
a. SWIFT stands for Society for World wide Inter-bank Financial Telecommunications.
It is a Belgium based company providing messaging facility to financial institutions.
All the technical support is provided by SWIFT from Belgium. Server is dialed
through ISP (Cyber Net) and Equent reata is their network partner as back up
account. This software is operated on Microsoft windows 2000 server and uses 16 –
bit security algorithm.
b. There are 10 SWIFT centers at ABL which are controlled through COK. Their server
setup is as under:
i. Production Server
ii. Backup Server
iii. Disaster Server
c. There are three types of licenses which are
i. Server License
ii. PC Connect License
iii. LAN Network License
d. Instructions or messages are entered, authorized, verified and uploaded in the system.
e. Terminals dial through external modem to main server at COK which is then
connected to main server of SWIFT. A terminal is automatically disconnected after
60 seconds if remains idle.

f. “Incoming Message Register” is maintained for incoming messages and similarly

“Outgoing Message Register” is maintained for messages that are sent from SWIFT
center to other branches.
g. Messages from branches are dispatched or sent in person to SWIFT office.
h. Incoming messages are stamped, signed and sent through TCS to branches.
Communication of messages with branches can be routed through email. For security of
these messages certain test code or encryption algorithms can be used.

Special Asset Management (SAM)

a. Role of SAM is to negotiate with customer having non-performing loans. SAM tries
to regularize, right off or receive back the non-performing loans (NPL).
b. Currently there are 27000 non-performing accounts out of which 500 accounts are
worth more than Rs.10 million each. Out of 27,000 accounts, 780 are agriculture
loans.
c. Risk Management group identifies the NPL to SAM and these classified loans are
transferred to SAM branches from the branch where the loan was originally parked.
There are 20 SAM branches in the country specially setup for this purpose.
a. Most of the time is spent on data collection from SAM branches as no software
support is available. System access can help to overcome this problem.
b. System should be capable to produce reports and analysis on customer’s payments,
directors and company information.
c. There is no system available in SAM to keep record of legal advisors, cases attached
with each advisor, payments and due dates. There should be a system capable of
handling all these requirements.
d. This department is not yet involved in Core Banking study exercise. Perhaps their
participation can give some value.

Manual Registers
1. Account opening register
2. Cheque book issue register (for current & saving it is different).
3. Term Deposit ledger.
4. ATM Card Register
5. ATM pin code issuance register.
6. Cash Deposit Long book (Cashier Long Book)
7. Cheque Deposit Long book (Cashier Long Book)
8. Inward Clearing Register
9. Outward Clearing Register
10. Intercity Clearing Register
11. OBC Register
12. Online Register
13. SNDR Register
14. TDR Register
15. Cashier Daily memo book
16. Cash in/out register
17. Suspense register
18. Cash in Transit Register
19. SBP Cash Register
20. Cheque return register
21. DD issue register
22. DD Payable register
23. TT outward
24. Balance book for DD
25. Pay order issue register manual
26. DAC issue registers.
27. Locker Register
28. Register of Visits
29. Keys Register

30. SFF – Safe, Fixture, Furniture Register for Fixed Assets (Category Wise)
31. Attendance Register
32. Leave Record Register
33. Stock of Stationary in Hand register
34. Security Stationary Register
35. Office Order Register
36. Prize Bond Register
37. Advance Rent Register
38. Voucher Register
39. Voucher Movement Register
40. Executives’ Visit Book
41. Peon Book
42. Stamps in Hand
43. Inward Dak Register
44. Outward Dak Register
45. Markup registers
46. BFL Register / Sanction Advice
47. DAC Issuance Register
48. Document Movement Register
49. Safe Keeping Register
50. Hypothecation Register
51. Pledge Register
52. Intimation Register
53. Cash Chest
54. Cashier Memo Book
55. Signature Register (from People to whom cash is given for sorting)
56. Cash In Out Register
57. SBP Register
58. LC Opening Register
59. Payment Against Documents (PAD) Register
60. LC Lodgment Register

61. FIM register

62. FATR Register
63. Force FIM register
64. FUBA Register
65. FADB Register
66. E-Form Issuance Register
67. FDBC (Foreign Documentary Bills for Collection) Register
68. Proceed Realization Certificate Register
69. Advance Payment Register
70. FBN (Foreign Bills Negotiated) Register
71. FBD Register
72. FBP (Foreign Bills Purchased) Register
73. Finance against Packing Credit (FAPC-I) Register
74. Finance against Packing Credit (FAPC-I) Register
75. Finance against Packing Credit (FAPC-II) Register
76. FC Account Opening Register
77. FC Long Book
78. FC Cashier Memo Book
79. FDD Register

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Branch Operations

Document ID: ABL Branch Study

Proprietary and Confidential Information

Allied Bank Limited

Author Date Version Description

1.1 Account Opening Formalities...............................................................................7

1.2 Account Opening & Maintenance Process..........................................................7

1.3 ATM Card Issuance............................................................................................20

1.4 Cash Deposit.........................................................................................................21

1.5 Cash Withdrawal.................................................................................................23

1.6 Physical Cash Management................................................................................25

1.9 Outward / Inward Bills for Collection (OBC/IBC)..........................................40

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1.9.1 OBC / IBC........................................................................................................................................40

1.11 Online Transactions.............................................................................................42

1.12 Term Deposit........................................................................................................45

1.13 Inter Branch Transactions (Pak Account)........................................................48

1.14 ATM Operations..................................................................................................49

1.15 Locker Operations...............................................................................................51

1.16 Utility Bills............................................................................................................54

1.17 Prize Bonds...........................................................................................................55

1.18 General Accounts.................................................................................................56

1.19 General Processes................................................................................................57

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1.19.15 Attendance Management.............................................................................................................62

2.4 Credit Application Package................................................................................68

2.5 Credit Approval...................................................................................................74

2.6 Credit Administration Department (CAD).......................................................79

3 Home Remittance Cell (HRC)............................................................................84

3.1 Remittances Processing.......................................................................................84

3.2 MIS Reporting.....................................................................................................85

4.1 Nostro Account Reconciliation...........................................................................87

4.2 Pak Account Reconciliation................................................................................89

4.3 Allied Bank Rupee Travelers Cheque................................................................89

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5 Alternate Delivery Channels...............................................................................90

5.1 ATM Card Generation........................................................................................90

5.2 Call Center...........................................................................................................91

6 Special Asset Management (SAM).....................................................................94

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Corporate & Commercial Special Corporate

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1 Account Opening Formalities

2 Account Opening & Maintenance Process

2.1 Account Types

2.2 Initial Deposit Limit

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2.3 Account Opening Forms (Package)

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c. Proper Inventory Management should be introduced for maintaining the record of

1.1.1.1 Account Number

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1.1.1.3 Account Major Information (Account Title, NIC, Address)

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1.1.1.4 Minor’s information

1.1.1.5 Operating Instructions

1.1.1.6 Zakat Deductions

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1.1.1.7 Address of Contact Person / Next of Kin Information

1.1.1.8 Special Instructions

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1.1.1.9 Specimen Signature Card